In a move that surprised many, President Trump recently imposed a substantial tariff on the European Union (EU), claiming that the EU was designed to harm the American economy. There have been numerous public debates about the impact of import tariffs on the economy, resulting in a lot of misinformation. We decided to conduct our own research and examine the history of tariffs between the EU and the U.S., since the EU was established in 1993.

Tariffs are a complex tapestry, and not all goods receive the same tariff rates. For example, since 1993, the EU has imposed a tariff on U.S. milk, while the U.S. applied only a 20% tariff on European milk. But does this tell the whole story? Does the tariff rate matter if no imports are occurring? Not really—after all, 100% of zero dollars is still zero.

While data like an unmatched 50% tariff for 31 years sounds like a bad deal, is it truly significant? We decided to evaluate the impact of tariffs on the economy, specifically on GDP, and what we found was surprising.

Baseline

First, we established a baseline by examining how the U.S. and EU economies evolved over the 32 year period. In 1993, the EU’s GDP was $6,500 billion, while the U.S., GDP was $9,600 billion. As expected, both economies experienced good and bad years, but overall, they grew steadily. By 2024, the EU’s GDP had risen to an impressive $19,400 billion, while the U.S. GDP reached $29,168 billion. Notably, while both economies grew, the U.S. economy outpaced the EU, with a 322% increase compared to the EU’s 198%. This baseline is important because we would expect roughly proportional increases in trade in both directions.

Passenger Vehicles

While analyzing the data, we found the discrepancy in passenger vehicle trade particularly intriguing. Between 1993 and 2024, the EU increased its vehicle exports to the U.S. from $50 billion to $120 billion. Meanwhile, the U.S. increased its vehicle exports to the EU from $20 billion to $50 billion. Despite the U.S. economy growing faster than the EU’s, U.S. exports underperformed compared to EU imports. This anomaly suggests an unseen force affecting trade. Upon examining tariffs, we found that the EU maintained a 10% tariff on U.S. vehicle imports, while the U.S. imposed a modest 2.3% tariff on EU cars.

While tariffs clearly play a role, other factors, such as environmental regulations like the EU’s CO2 emissions standards (Regulation (EU) 2019/631) and preferential policies, further hinder U.S. car imports into the EU.

Trucks

A similar trend appears in the truck sector. In 1993, the EU exported $10 billion worth of trucks to the U.S., increasing to $24 billion by 2024. Meanwhile, U.S. truck exports to the EU grew from $5 billion in 1993 to $13 billion in 2024, again lagging behind EU imports.

Aerospace

Even U.S. aerospace exports trail those of the EU. In 1993, the EU exported $10 billion in aerospace products to the U.S., growing to $34 billion by 2024. The U.S., starting at $8 billion in 1993, reached $32 billion by 2024.

Textiles

The only sector where the EU outperformed the U.S. was textiles. The EU’s textile exports to the U.S. grew from $5 billion in 1993 to $13 billion in 2024, a 160% increase. In contrast, U.S. textile exports to the EU grew from $10 billion to $20 billion, a 100% increase. While both markets expanded, the EU’s growth rate outpaced that of the U.S.

Upon reviewing the data, it appears that President Trump has a valid point. The imbalance in trade tariffs does seem to impact the import and export of goods between the EU and the U.S. While the differences may not always seem significant, keep in mind that we are dealing with billions of dollars, where even small disparities can have a massive economic impact.