Europe has always been an important trading partner of the United States, consistently providing a major import-export market. As the United States and Europe have increased investment in each other’s domestic economy through corporate globalization, their trading relationship has become more open and free of barriers, resulting in economic growth for both.
The United States’ primary import-export market has been Canada and the European nations, especially Great Britain. After World War II, the United States began to trade with more countries, including those in Latin and South America, Asia, Australia, and Africa; however, until that time, foreign trade was generally understood to mean trading with Canada and Europe.
The United States followed a policy of protectionism until the 1940’s. Tariffs and import-export policy were considered domestic issues until the 1920’s, and the government’s chief objective was to protect farmers and manufacturers from foreign competition. The Constitution prohibited duties on exports but not tariffs on imports. In 1789, the United States Congress passed its first
During the War of 1812, American manufacturers operated without any competition from British manufacturers. In 1816, after the war concluded, tariffs were raised to protect American manufacturers by keeping imports from Britain low. The increased tariff was also seen as a means for paying the war debt. However, British goods appeared in American markets in spite of the tariffs. Not all members of Congress were in favor of high tariffs. A battle over tariffs ensued in 1828; those opposed to tariffs encouraged the protectionist members of Congress, who were preparing a new tariff bill, to place in the language of the bill excessively high tariffs on every possible commodity. They believed that the bill would defeat itself. They were wrong, and a bill known as the
The high tariffs caused both domestic and international problems for the United States. Europe was a major market for the cotton and tobacco grown on the plantations in the southern states. The high tariffs angered the European markets and made export sales difficult as retaliatory tariffs and duties were implemented. Domestically, the southern farmers viewed the tariffs as an attack on their economic and cultural base. This widened the chasm between North and South in the United States.
From 1870 through the 1920’s, the U.S. stance on tariffs depended on which political party had control of Congress. A pattern of lower tariffs under Democratic Party control and higher tariffs under Republican Party control developed. However, the United States became more and more isolationist, and tariffs began to decline less during periods when the Democrats were in control. In 1930, the
In 1934, the United States changed its policy on trading. European countries were not willing to trade with the United States as long as such high tariffs were in force. Cordell Hull, secretary of state under President Franklin D. Roosevelt, obtained an amendment to the Smoot-Hawley Tariff Act that would cut tariffs equally with trading partners. This became the
During World War II, trade was seriously interrupted. After the war, the role of the United States in international affairs and trading changed dramatically. The war-torn countries of Europe were trying to rebuild their economies and their countries. Cooperation became the action plan between European countries and the United States. The United States looked on Europe as its ally, from both a defense and an economic standpoint. The United States modified its trading policy and encouraged imports. By 1948, the
Until 1958, the United States had entered into trading agreements primarily with individual European countries. However with the signing of the Treaty of Rome, the situation changed. France, West Germany, Italy, Belgium, Luxembourg, and the Netherlands formed the
Although the United States favored a united Europe and was willing to make many concessions, including tariff reductions as described in the
On February 7, 1992, with the signing of the Treaty of
The two trading units, which are basically on the same socioeconomic level, engage in a considerable amount of intraindustry trade. Many similar products are both imported and exported by the two trading partners. The European Union is the United States’ second-largest trading partner in merchandise and goods and its largest trading partner in services. Although since 1993, the United States has imported more goods than it has exported to the European Union, it also has exported more services than it has imported from the European Union.
Although the United States and the European Union enjoy a cooperative trade relationship, disputes continue to arise between the trading partners. Many of these result from regulations and policies adopted to protect various segments of the members’ domestic economies.
Areospace is another trade area in which the United States and the European Union have argued over subsidies. This dispute has centered on subsidies provided by the United States to Boeing Aircraft and by various European Union nations (France, Spain, the United Kingdom, and Germany) to Airbus Industrie. Each trading partner maintains that the subsidies are necessary for the aircraft manufacturers to remain competitive
Differing attitudes toward social and environmental protection have also caused trading problems between the United States and the European Union. Domestic health and
The interdependency of the United States and the European Union has significantly affected the trade relationship between the two political entities, and this relationship is highly influential in the global economy.
Baldwin, Robert E., Carl B. Hamilton, and Andre Sapir, eds. Issues in U.S.-EC Trade Relations. Chicago: University of Chicago Press, 1988. Discusses the European Community (European Union’s predecessor) and its relation with the United States. Essays with commentaries giving both U.S. and EC opinions on issues. Author and subject indexes. Cohen, Stephen D., et al., eds. Fundamentals of U.S. Foreign Trade Policy. Boulder, Colo.: Westview Press, 2002. Chapters on U.S.-EU relations, U.S. legislation regulating imports and exports, and who does what in U.S. trade policy. Index. Appendix of Web sites on international trade. Featherstone, Kevin, and Roy H. Ginsberg. The United States and the European Union in the 1990’s. New York: St. Martin’s, 1996. Discuses economic interdependence of the United States and the European Union. Tables, appendixes. Hamilton, Daniel S., and Joseph P. Quinlan. Partners in Prosperity: The Changing Geography of the Transatlantic Economy. Baltimore: Johns Hopkins University Press, 2004. Looks at the ever-increasing dependency and interconnectedness of the United States and Europe. Discusses investment, trade, and employment links. Petermann, Ernst-Ulrich, and Mark Pollack, eds. Transatlantic Economic Disputes: The EU, the U.S., and the WTO. New York: Oxford University Press, 2004. Examines disputes such as the beef-hormone case, how the WTO functions, sources of dispute, and possible future remedies.
Asian trade with the United States
Canadian trade with the United States
Chinese trade with the United States
Colonial economic systems
General Agreement on Tariffs and Trade
International economics and trade
Japanese trade with the United States
Latin American trade with the United States
Mexican trade with the United States
World Trade Organization