Published on: April 8, 2025 / update from: April 8, 2025 - Author: Konrad Wolfenstein
The US services from Google, Amazon, Meta, Apple, Microsoft, Tesla and Nvidia, which are missing in the US trade balance-Image: Xpert.digital
Inequality or balance? Facts about the trade balance between the USA and the EU
The claim that the trade balance between the USA and the EU is unjust in favor of the EU does not withstand a detailed analysis
If you were honestly looking at the numbers, the EU would have to be entitled to tariffs and not the other way around.
In 2023, the EU exported goods worth 503 billion euros to the United States, while they imported goods worth 347 billion euros, which led to this commercial surplus of EUR 156 billion in favor of the EU.
In contrast, in 2023 the USA exported services worth 427 billion euros to the EU, while it imported services worth 319 billion euros, which led to this surplus.
If you take into account the service balance sheet, which records a surplus of 108 billion euros for the USA, the difference is reduced to just 48 billion euros. This corresponds to only 3% of the total trade volume between the USA and the EU, which indicates an overall relatively balanced transatlantic trade relationship.
The entire trading volume between the USA and the EU in 2023 was an impressive 1.6 trillion euros, including trade in goods and services.
- Commercial volume were: 851 billion euros (EU exports: 503 billion euros; EU imports: 347 billion euros).
- Commercial volume Services: 746 billion euros (EU exports: 319 billion euros; EU imports: 427 billion euros).
However, a crucial factor of this image distorts: A significant part of the income of US technology companies, in particular the “Magnificent Seven” (Google, Amazon, Meta UA) from digital services in Europe, is not covered as a direct US export. These companies often operate through branches in countries such as Ireland or Luxembourg, from where the invoice is carried out. As a result, these sales are statistically booked as internal European trade and are therefore not recorded in the US service balance.
The service sales of the Magnificent Seven not recorded in the US trade balance are ≈160 billion euros *1 . This number explicitly only takes into account services (advertising revenues, cloud services, software), while hardware sales and other physical products were taken out.
This shows that the often discussed “trade inequality” between the United States and the EU is due to statistical gaps in the collection of digital services. With the involvement of these sales, there is a much more realistic picture that underlines the close economic interdependency and parity between the two economic areas.
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Alphabet/Google
Alphabet/Google generates annual sales of over 100 billion euros in the EMEA region (Europe, the Middle East, Africa). According to reports, sales in Europe and the surrounding areas (EMEA) for the first time reached over $ 100 billion, which corresponds to around $ 102 billion.
Invoices for services such as Google Ads or Google Workspace are issued by the Irish branch. These income does not flow directly into the US service balance sheet, since they are handled by Google Ireland in accordance with EU regulations and tax regulations. This means that taxation and invoicing often correspond to local regulations, including the “Reverse Charge” procedure for VAT.
Amazon
Amazon generates sales in Europe every year, which is controlled by the headquarters in Luxembourg. These sales do not flow into the US service balance sheet because they are handled by the Luxembourg branch. This enables Amazon to benefit from the tax advantages of Luxembourg and at the same time to comply with the local EU sales tax regulations, such as the reverse charge procedure or settlement with local sales tax since August 2024.
Meta
Meta achieves annual income of almost 40 billion euros in Europe, mainly through digital advertising. According to reports, the advertising revenues in Europe exceeded $ 10 billion in one quarter for the first time, which underlines the company's strong market presence in the region.
The invoicing for services such as META ADS takes place via the Irish branch of the company. These sales are therefore not recorded in the US service balance sheet, since they are carried out locally according to the tax and regulatory requirements of the EU.
This practice leads to a distortion of the trade balance between the USA and the EU, since the economic importance of US companies in the European market is not fully mapped. The lack of consideration of such sales helps to underestimate the actual strength of US service exports and significantly influences the perception of trade relationships.
Apple
Apple achieved a total turnover of $ 101.3 billion in Europe in the 2024 financial year, whereby sales from services (such as App Store, ICloud and Apple Music) make a significant share. The global income from the service segment amounted to $ 96.2 billion, and Europe is the second largest market of the company with a share of around 26 % in total sales.
The income from the service segment in Europe amounts to an estimated $ 26.34 billion.
The offsetting of European sales - as with many others - is largely via Ireland, where Apple has its headquarters for the EMEA region (Europe, the Middle East and Africa). Due to its low corporate tax rate, Ireland offers attractive conditions for multinational companies such as Apple. This enables Apple to book profits from European services cheaply. However, the EU has repeatedly intervened against Apple's tax practices in Ireland, which led to a recovery of billions of taxes.
Tesla
The exact sum that Tesla receives for services in Europe is not directly available because sales from services are not shown separately. However, there are some indications:
Tesla total revenue: Tesla generated total sales of $ 97.7 billion in 2024 (approx. 89.5 billion euros). Of this, $ 8.3 billion (approx. 7.6 billion euros) accounted for to the “Services and other” area, which includes services such as maintenance, repairs and software upgrades.
Share of Europe: Europe is one of the largest markets for Tesla, although it was about 16 % of the global vehicle rate in 2023. It is plausible to assume that a similar share in the service proceeds is no longer necessary.
Estimation of service income in Europe: If around 16 % of service income is no longer available on Europe, Tesla should achieve around 1.2 billion euros from services in Europe. However, this number is an estimate and depends on the exact regional distribution of income.
Nvidia
The total amount that NVIDIA receives for services in Europe can only be estimated from the available data, since the exact breakdown for services is not shown separately. However, there are indications of Europe's share in the total sales of Nvidia:
European share of sales: Europe contributes around 11.17 % to the total sales of Nvidia.
Total turnover 2025: The total turnover of NVIDIA in the 2025 financial year was $ 130.5 billion.
Nvidia's estimated sales in Europe for the 2025 financial year is around $ 14.57 billion. However, this amount includes all income from Europe and not exclusively services.
Tesla and Nvidia's services are mainly performed in the United States, with both companies also having significant activities in Europe and other regions.
Microsoft
Microsoft achieves considerable sales in Europe with its services, especially through cloud services such as Azure, Office 365 and other digital products. While exact figures are not directly available for European sales, cloud and server products worldwide make up the largest part of the income, with around $ 97 billion in the 2024 financial year.
Most of the European sales are offset by the Irish subsidiary Microsoft Ireland Operations Ltd., since Ireland serves as a central location for Microsoft's European activities. This enables the company to benefit from the low corporate tax rates in Ireland. Microsoft often licenses software and services for Europe, the Middle East and Africa (EMEA) via Ireland, which offers tax advantages.
In addition, Microsoft maintains other locations in Europe, such as the new digital sales center in Barcelona, which serves European customers. Nevertheless, Ireland remains the main location for tax and operational offsetting within Europe.
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Sales of the Magnificent Seven in Europe not shown in the US trade balance sheet
Calculation of the non -designated sales (approximate estimate):
- Alphabet/Google: $ 102 billion (approx. 93.4 billion euros)
- Amazon: 50 billion euros
- Meta: 40 billion euros
- Apple: $ 26.34 billion (approx. 24.1 billion euros)
- Tesla: EUR 1.2 billion (estimated)
- NVIDIA: $ 14.57 billion (approx. EUR 13.3 billion, total sales of Europe, of which are not known)
- Microsoft: Here the estimate is more difficult. Since no specific number for Microsoft's service sales in Europe is named, we assume that a significant part of the $ 97 billion sales from cloud and server products worldwide no longer apply to Europe. It can be assumed that at least 25% of which are generated in Europe, which corresponds to about $ 24.25 billion (approx. 22.2 billion euros).
Based on the available data and estimates, the “Magnificent Seven” generate around 244.2 billion euros in sales in Europe that are not recorded directly in the US trade balance as US exports.
Important comments:
- Estimates: Many of these figures are estimates because the exact sales per region and the breakdown between goods and services are often not publicly available.
- Not only services: Some of the sales mentioned (especially at Amazon, Apple and Tesla) also include sales sales. However, the focus is on the service components that usually do not appear in the US trade balance.
- Reduction prices: The topic of clearing prices (transfer pricing) was not dealt with here. The figures mentioned here are based on the proven sales of the European branches. It is conceivable that further profits will be relocated to the USA through internal offsetting, which would further influence the meaningfulness of the trade balance.
- Methodological restrictions: The calculation is necessarily simplified. A more precise analysis would require more detailed financial reports from the individual companies and would have to take into account the complex mechanisms of international tax planning.
- However, the majority of these income is booked in Ireland or Luxembourg, where companies have their European headquarters to benefit from the low tax rates. This means that these income does not appear in the US trade balance and the actual strength of US service exports is underestimated.
All of this shows that the trade balance between the USA and the EU is clearly distorted. The sales of the large technology companies that are handled through European branches are not fully recorded as US exports, which leads to an underestimation of the economic importance of the United States in the European market.
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Model-based and analytical estimate for the EU trade deficit with the USA*1
The above 244.2 billion euros include both service and sometimes non-service sales (e.g. hardware sales). In order to isolate only the service sales not recorded in the US trade balance, the non-service shares must be deducted. Here is the precise calculation:
Step-by-step adjustment
1. Alphabet/Google
- Total turnover (EMEA): 93.4 billion euros.
- Estimate: 20 % hardware/cloud (non-services).
- Services: 93.4 × 0.8 = 74.7 billion euros.
2. Amazon
- Total turnover (Europe): 50 billion euros.
- Estimate: 20 % AWS (cloud services), 80 % e-commerce (non-services).
- Services: 50 × 0.2 = 10 billion euros.
3. Meta
- Total turnover (Europe): 40 billion euros.
- Estimation: 90 % advertising (services), 10 % hardware/other.
- Services: 40 × 0.9 = 36 billion euros.
4. Apple
- Service sales (Europe): 24.1 billion euros.
- Note: Apple explicitly indicates service sales that are already isolated.
5. Tesla
- Total turnover (Europe): 1.2 billion euros.
- Estimation: 90 % vehicle sales (non-services).
- Services: 1.2 × 0.1 = 0.12 billion euros.
6. Nvidia
- Total turnover (Europe): 13.3 billion euros.
- Estimation: 90 % hardware (chips), 10 % software/services.
- Services: 13.3 × 0.1 = 1.33 billion euros.
7. Microsoft
- Estimated service sales (Europe): 22.2 billion euros.
- Estimation: 80 % cloud/software (services), 20 % hardware.
- Services: 22.2 × 0.8 = 17.76 billion euros.
Result of the adjusted service sales
The adjusted result of the service sales shows the following distribution: Alphabet/Google achieved sales of 74.7 billion euros, while Amazon generated 10.0 billion euros. Meta came to 36.0 billion euros, followed by Apple with 24.1 billion euros. Tesla recorded only 0.12 billion euros, Nvidia 1.33 billion euros and Microsoft 17.76 billion euros. Overall, service sales add up to 164.0 billion euros.
Recommendation for generalization: 160 billion euros
- The precisely adjusted sum of service sales is EUR 164 billion.
- A flat rate of 160–170 billion euros would be scientifically sound.
- 200 billion euros would be too high because they disregarded non-services (e.g. Tesla's car sales).
The service sales of the Magnificent Seven not recorded in the US trade balance are ≈164 billion euros. This number explicitly only takes into account services (advertising revenues, cloud services, software), while hardware sales and other physical products were taken out.
Nevertheless, the EU does not “complain about this deficit, for several reasons:
- Mutual dependency: The Magnificent Seven companies create jobs, invest in local infrastructure (e.g. data centers) and drive the digital transformation in the EU.
- Tax income: Despite releasing profits, billions flow through sales tax and national taxes (e.g. digital taxes) to EU countries.
- Regulatory focus: The EU focuses on laws such as the Digital Markets Act or the AI regulation to correct power weights instead of escalating trade conflicts.
- Global integration: Much of the services (e.g. cloud computing) is essential for European companies-an open conflict would damage both sides.
The apparent deficit thus reflects less a real weakness, but rather the complex symbiosis between US tech giants and the European economy.
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