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Reinforcing EU-US Trade Relations through Allied Competitiveness

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By Hendrik Bourgeois, Vice President of EU Government Relations, and Al Thompson, Vice President of U.S.-Canada Government Affairs, at Intel Corporation

€1.5 trillion ($1.56 trillion). That is the value of the EU-US trade volume that Ursula von der Leyen recalled when addressing the World Economic Forum in Davos just a day after Donald Trump’s inauguration as President of the United States. The President of the European Commission stressed that “no other economies in the world are as integrated as Europe and the United States.” She is right. This is further supported by AmCham EU’s The Transatlantic Economy 2024 report[1] which estimates the transatlantic economy at approximately €8.3 trillion ($8.65 trillion). As Europe contemplates new industrial policies, it is vital to remain clear-eyed about the EU-US relationship as a cornerstone of European competitiveness. The semiconductor industry exemplifies this strategic interdependence.

Changing administrations, governments, and regulators notwithstanding, the transatlantic partnership has long been key to global economic stability and mutual prosperity. As allies, the EU and US have been facing off the world’s greatest geopolitical challenges shoulder-to-shoulder. As competitors, American and European companies strive on and grow off each other’s innovations and successes. The key to maximizing the benefits of this symbiosis is Washington and Brussels working closely together. This is what the German Marshall Fund (GMF) correctly calls ‘allied competitiveness’[2].

The Role of US-EU Collaboration

According to the GMF, allied competitiveness is about each side adopting policies that are “mutually reinforcing, complementary, and politically practical.” Nobody expects the Americans and Europeans to agree on everything all the time.  That hasn’t been the case in the past and is certainly unlikely to be the case in the future.  That is not the point. Allied competitiveness is about seeing eye to eye on the most important and consequential things like defence and deterrence, setting international standards, and economic security.  

It is about realizing that taking these actions together with one’s closest allies is far more cost-effective and value-maximizing than going it alone. European businesses in America and vice versa create 16 million jobs, invest nearly €96 billion ($100 billion) in R&D annually, and sell each other goods and services to the tune of €6.7 billion ($7 billion)[3]. This mutual economic dependence is balanced and clearly benefits both sides enormously making it harder for companies to benefit from each other’s strengths would come at a steep cost for both the EU’s and the US’ respective positions in global markets. Neither can achieve economic security without the other.

Balancing Economic Security and Trade

At a time of increased competition from rivals, allies must double down on their partnership to navigate the complexities of the global trade landscape. A more assertive trade defence is an integral part of the EU’s Economic Security Strategy, as well as the Competitiveness Compass. On the other side, Donald Trump’s America First Trade Policy also takes a tougher stance on international commerce and increases economic protectionism. Both follow their own specific goals, but neither must forget that dealings with friends achieve the best end result. The semiconductor industry serves as a compelling case study in this regard.

As a global industry, semiconductor manufacturing relies heavily on cooperation between EU and US firms.  And both the US and the EU are facing common challenges: fierce competition in other parts of the world. Ensuring unfettered access to critical technologies, preventing unforeseen supply chain disruptions, and maintaining technological leadership are goals shared by both Washington and Brussels. And neither can achieve them without the other. Not in the past, not now, not in the future. An allied competitiveness approach is essential.

The EU and US Chips Acts are a step in that direction. These complimentary policies play a crucial role in rebalancing the global supply chain and increasing resilience in both regions. Ensuring there is a government-led economic dialogue between the EU and the US is important to companies operating on both sides of the Atlantic. Establishing an EU-US Critical Tech and Dual Use Council, as proposed by DigitalEurope[4], is an idea worth exploring. As the EU weighs a potential Chips Act 2.0, it is essential that its investments, incentives, R&D collaboration, and other benefits are afforded not based on geographical, but on allied, meaning complementary, considerations.

Allied Business Ecosystems

Semiconductor companies like Intel have been great beneficiaries of allied competitiveness and are amongst its major drivers and promoters. Our manufacturing sites in Arizona, New Mexico and Oregon are powered by European lithography machines, as is our Leixlip site in Ireland, where we invested over €30 billion ($31 billion) in our operations since 1989. Imec, the world leader in nanoelectronics R&D and key partner of Intel, has been working with and contributing to the technological success of US chipmakers and fab equipment suppliers for four decades. Whether in Oregon, California, Arizona, Ireland, Germany or Poland, our R&D and innovation labs build on each other’s discoveries, advances, and talent. Our know-how helps train new generations of engineers across Europe. Our company has deep roots on both sides of the Atlantic, and they are critical to our growth and global competitiveness.

The chips sector is not the only one that enjoys these perks. AmCham EU’s The Transatlantic Economy 2024 report finds that the transatlantic relationship has been reaching new heights. Europe bought more American goods, services and energy than ever before. US companies made record sales in Europe as did EU companies in America. Almost two-thirds of all foreign direct investment in the US comes from the EU and the same applies the other way. This is allied competitiveness fuelling innovation ecosystems and driving entire economies.

Conclusion

As new administrations on both sides of the Atlantic are settling in, it is imperative that each embrace a pragmatic and forward-looking approach to transatlantic trade relations. The importance of EU-US collaboration cannot be overstated. Allied competitiveness holds the key to mutual economic resilience and innovation. As with any relationship, the transatlantic one will take a lot of work, soul-searching, and, ultimately, compromises. Europe ought to take American concerns about defence spending, over-regulation, and China to heart. On the other side, the US should appreciate the access the European Single Market offers to its companies. And on the international stage, there is no greater ally to America than the Europeans. Working together will make each side far greater than going it alone.

 

1 AmChamEU, The Transatlantic Economy, 2024

2 Allied Strategic Competitiveness, 2025

3 AmChamEU, The Transatlantic Economy, 2024

4 DIGITALEUROPE's reaction to the US export controls on chips for AI, 2025