Trade disputes between the United States and the European Union threaten to cut into profits for companies on both sides. Tensions are escalating, and resolving the standoff is becoming increasingly difficult.

According to Reuters, citing a warning from the American Chamber of Commerce to the EU, the trade conflict could put at risk $9.5 trillion in annual transatlantic business. That is a staggering figure!

The American Chamber of Commerce, which represents over 160 members, highlighted that goods and services trade between the US and the EU hit a record $2 trillion in 2024. However, the ongoing standoff and tariff wars could derail this positive trajectory.

In particular, Washington imposed tariffs on steel and aluminum in March, prompting EU leaders to announce retaliatory measures. The move infuriated the US president, who then threatened the bloc with 200% tariffs on European wine and other alcohol imports.

According to the American Chamber of Commerce, trade is just one part of the transatlantic economic relationship. For most corporations, investment flows are the real focus.

"Contrary to conventional wisdom, most US and European investments flow to each other, rather than to lower-cost emerging markets," the chamber noted.

Notably, US foreign affiliate sales in Europe are four times higher than US exports to the continent, and European affiliate sales in the United States are three times higher than European exports.

In the current environment, experts fear that the trade war could hit intra-company trade, which accounts for 90% of Ireland's exports and 60% of Germany's exports. Beyond trade in goods, the conflict could also spill over into services and energy markets, including US LNG exports to Europe. "Ripple effects of conflict in the trade space will not be confined to trade. They ripple through all of those other channels and the interactions are quite significant," the chamber warned.