Expertise
Less USA, more EU - German agricultural trade takes place primarily on the domestic market
Martin Banse | 11.04.2025
US President Donald Trump complains that the trade balances between the USA and the EU are not even. The Thünen Institute for Market Analysis has therefore taken a closer look at agricultural trade. Who imports or exports which products and in which quantities? How large is the actual trade deficit and which effect do increased tax rates have? An analysis.
US President Donald Trump has threatened to increase tariffs on imports from the EU and other countries. What losses are actually impending? A look at the trade data (Figure 1) shows that the EU internal market is the main pillar of German agricultural trade: around 78 per cent of German agricultural exports and 70 per cent of agricultural imports are accounted for by EU member states. In contrast, trade with so-called third countries, meaning countries outside the EU, plays a much smaller role. Within this third-country trade, the US market is important. However, it is not dominant: around 16 per cent of exports to third countries go to the United States. Around ten per cent of the corresponding imports come from the country.
Importance of foreign trade in agricultural products and food
Overall, bilateral trade in agricultural products and food between Germany and the USA is slightly in deficit: in other words, the value of German agricultural imports from the USA is lower than the value of German exports of agricultural products and food to the USA (Figure 2). However, these trade flows differ significantly in terms of their composition.
German exports to the USA consist mainly of highly processed foods and luxury foods -namely, products with high added value. These include chocolate, baked goods and alcoholic beverages. These products are displayed in orange and blue in the charts and are shown in the area above the zero line.
In contrast, US exports to Germany are more broadly based. In addition to processed foods, unprocessed agricultural commodities such as oilseeds, especially soya beans, as well as fruit and vegetables also play an important role. These imported goods are shown below the zero line in the charts.
The trade balance is therefore asymmetrical not only in terms of value flows, but also in terms of product types. While Germany supplies high-quality end products, it mainly imports agricultural raw materials and staple foods from the USA.
Is foreign trade between the EU and the USA fair?
On average, the EU and therefore also Germany levy higher tariffs on US agricultural products than vice versa. This applies in particular to certain processed foods such as sugar and dairy products (Figure 3). Is this unfair, as US President Trump claims?
A closer inspection puts this picture into perspective. The difference becomes significantly smaller when the so-called weighted average tariffs are calculated. These take into account the real significance of individual product groups. The EU's average weighted tariff rate on US agricultural products is around 8.1 per cent, while the corresponding US tariff rate on EU products is around 5.5 per cent.
A key reason for this comparatively small difference lies in the composition of imports: around a quarter of German agricultural imports from the USA consist of oilseeds such as soya beans, a product group for which no customs duties are levied in the EU. These duty-free raw materials significantly reduce the average tariff rate for US products overall.
The tariff structure is therefore asymmetrical on both sides, but not clearly unfair. Rather, the differences result from the respective trade strategic interests and the product composition in agricultural trade.
Further Informations
- Project brief 2025/18aBanse et al.; Effects of the ‘new’ US trade policy on international agricultural trade
- Project brief 2025/16aJanine Pelikan, Tatjana Döbeling; Update: EU-Mercosur Agreement - Implications for the Agri-food Sector
