US trade and industries at risk for Greenland's European allies

Donald Trump called off planned tariffs on European military allies that opposed his vow to acquire Greenland for the US, but it's worth examining the trade relationships that the US President indicated were in the balance.

The "NATO 8" countries that had faced 10% tariffs on Feb. 1 (and potentially 25% from June) include Germany, the UK, the Netherlands, France, Norway, Sweden, Finland and Denmark (Greenland's current owner).

We've charted the share of US imports from this group of nations versus the rest of the EU and other major trading partners. While NATO-8 exports have slowly declined in their relative importance (especially compared with Mexico), they still account for 10% of US imports.

Our second chart breaks down the NATO-8 exports in absolute terms. The auto powerhouse of Germany has the most at stake, with USD 153 billion in exports to the US over the past year.

Our third chart examines the relative importance of the US market to NATO-8 nations by two more metrics. The Netherlands (notable for its machinery sector, i.e. ASML's chipmaking machines) is most vulnerable when exports to the US are measured as a share of GDP. The UK (notable for pharma exports) is the most reliant on the US as a share of total exports.

Zeroing in to the NATO-4 (Germany, the Netherlands, the UK and France) allows a breakdown of potentially affected industries, again highlighting the role of cars, drugs and machinery. The US is most import-dependent on the NATO-4 in two notable categories: 32% of transport equipment imports excluding vehicles (i.e. Airbus jets, ships, rail cars, etc.) come from these European allies; for pharmaceuticals, the figure is 21%.

Meanwhile, the US and its NATO allies look likely to remain heavily financially intertwined, despite recent sales of US Treasuries by some European pension funds. The NATO-8 nations hold USD 8.5 trillion in long-term US securities.

If you are a CEIC user, access the story here.