These numbers have reinforced a fairly widespread – yet incorrect – view that China has become the top commercial partner of the United States and of Europe. Most such analysis equates international commerce only with trade in goods. Eurostat, the EU’s statistical agency, reports that EU27 goods trade with China in 2021 totaled ¤695 billion, compared to ¤631 billion in EU27 goods trade with the United States. That was a significant change from two years ago, when EU27 goods trade with the United States (¤620 billion), exceeded EU27 goods trade with China (¤562 billion). This shift was likely due to disruptions generated by the Covid-19 pandemic.

Trade between countries, however, doesn’t just consist of trade in goods. It also includes trade in services, which the Eurostat report did not include. Services trade has been growing faster than good strade. More European and American jobs depend on services than on goods, and the United States remains the EU’s top services trade partner.

While final numbers for trade in services are not yet available for the full year 2021, we do have data for the first three quarters of the year. Trade in services between the EU27 and the United States during that period was ¤361.8 billion – 5.6 times more than the trade in services between the EU and China, which totaled ¤64.6 billion.

If we annualize those figures to estimate total tradein goods and services of the EU for 2021, we find that EU27-China trade in goods and services likely totaled ¤782 billion in 2021, while EU27-U.S. trade was ¤1.1 trillion – 42% higher than EU27-China trade.

In short, if you look at overall trade flows and not just one kind of flow, it is clear that the largest trading partner for the EU is actually the United States, and the largest trading partner for the United States isthe EU, as it has been for decades.

If you want to know more about China's role in the transatlantic partnership, download our Transatlantic Economic Report.