Trade between the U.S. and Europe is growing, driven largely by higher exports of American fuels to help the eurozone weather the energy crisis sparked by Russia's invasion of Ukraine.
The total value of exports from the U.S. to EU countries rose 28.6% to $403.20 billion in 2022, according to data collected by the U.S. Census Bureau and compiled by Panjiva.
The U.S. ramped up exports of liquefied natural gas to Europe in the aftermath of the near-total removal of cheap Russian gas to the region. As the war in Ukraine continues and Europe remains largely cut off from Russian fuels, the region will continue to rely on storage and imports to shore up energy supplies, said Chris Rogers, head of supply chain research at S&P Global Market Intelligence.
"The EU is going to be leaning on the U.S. and the rest of the world on an ongoing basis," Rogers said in an interview. "It's difficult to see right now how long it's going to take for this war to end and how the EU is going to work with Russia as an economic partner."
Fuels drive increase
Mineral fuels such as coal, petroleum and natural gas marked the largest export category to Europe in 2022, totaling $103.40 billion. The total value of exports for the category also registered the largest increase, more than doubling year over year.
EU countries are slowly shifting to renewable energy sources, though the region will likely remain reliant on fuel imports to keep sufficient gas supplies for power and manufacturing needs, including the production of fertilizers and some petrochemicals, Rogers said. As the U.S. is a "swing producer" of gas with excess supply, exports will likely keep flowing.
"The challenge will come if U.S. gas prices keep going up" and American industries push for relief, Rogers said.
Roughly 23.3% of mineral fuel exports from the U.S. to Europe in 2022 went to the Netherlands at $24.05 billion. The U.K. and France followed in the second and third spots, at $20.18 billion and $14.83 billion, respectively.
Aircraft, spacecraft and parts of each registered the next-highest rise, jumping 17.2% year over year. The aerospace industry was disrupted by the COVID-19 pandemic and earlier by former President Donald Trump's trade war, though trade may normalize as demand for flights returns and tariff tensions cool, Rogers said.
US imports also rise
Imports from Europe to the U.S. also grew in 2022, although at a slower pace than exports. Imports from the region totaled $688.30 billion, up 10.6% from 2021.
Pharmaceutical products was the largest import category from Europe in 2022 at $121.01 billion.
The category has long been a strong driver of trade between U.S. and Europe, Rogers said. The pandemic shifted spending to items such as vaccines, personal protective equipment, ventilators and other medical devices.
Panjiva is the supply chain research unit of S&P Global Market Intelligence, a division of S&P Global Inc.