Pharma-adjusted EU goods trade Absent the transfer price/ tax avoidance driven pharma surplus with the US, EU goods trade is basically in balance ... 1/

The expansion in the EU's bilateral surplus with the US since the start of Trump's first term has essentially all be in pharma -- so a direct result of US tax policy (and Trump tax policy) not EU trade policy 2/

More generally, the expansion of the EU's pharma surplus (driven in large part by the perverse incentives in the Tax Cuts and Jobs Act & US pharma pricing) has obscured the second China shock driven deterioration in the EU's goods trade balance 3/

With the EU much closer to balance than in the past, it is clear that in a global sense the EU (and the euro area, which is covered by the chart) use their surplus with the Anglophone world (US and UK) to support Asia's broad surplus! 4/4