An Evolving Relationship
Since the end of World War II, the United States and Europe have forged a wide-ranging partnership. Often termed the transatlantic relationship, the U.S.-European partnership encompasses the 32-member North Atlantic Treaty Organization (NATO), relations with the 27-member European Union (EU), and extensive bilateral political and economic ties. Despite periodic tensions over the past 75 years, U.S. and European policymakers generally have valued NATO, the EU, and the broader relationship as serving their respective geostrategic and economic interests. During the Trump Administration, U.S.-European relations were strained by President Trump's strident criticism of NATO, the EU, and key European countries, as well as by policy divisions on a range of issues, including relations with China and Iran, tariffs and other trade issues, climate change, and managing the COVID-19 pandemic.
European officials welcomed Biden Administration efforts to decrease tensions, and U.S.-European cooperation has strengthened since Russia's invasion of Ukraine in 2022. At the same time, some foreign policy and trade differences persist. The 118th Congress has considered or may continue to evaluate U.S. interests in Europe, the future of NATO, implications of Russia's aggression in Ukraine, and prospects for U.S.-European cooperation on regional and global challenges, including China.
Transatlantic Relations and U.S. Interests
U.S. policymakers for decades have regarded both NATO and the EU as crucial to maintaining peace and stability in Europe and stymieing big-power competition that cost over 500,000 American lives in two world wars. The United States spearheaded NATO's creation in 1949 and encouraged the European integration project from its inception in the 1950s. During the Cold War, NATO and the European project were considered essential to deterring the Soviet threat. With strong U.S. support, NATO and the EU have enlarged since the 1990s.
The U.S. and European economies are deeply intertwined. U.S. data indicates that the transatlantic economy—made up of the United States, the 27 EU members, and the non-EU countries of the United Kingdom (UK), Norway, and Switzerland—typically generates around $6 trillion per year in foreign affiliate sales and directly employs up to 10 million workers in total. The United States and the EU are each other's largest overall trade and investment partners.
Officials and experts on both sides of the Atlantic assess that U.S. leadership of NATO and cooperation with the EU has helped foster democratic and prosperous European allies that, in turn, have bolstered U.S. foreign and security policies and the multilateral trading system. U.S. and European officials have worked together on many common challenges—from promoting stability in various regions (including the Balkans, Afghanistan, and Africa) to countering terrorism and cybercrime to addressing Russia's first invasion of Ukraine in 2014. Historically, U.S.-EU cooperation was a driving force in liberalizing world trade. Additionally, the well-honed habits of U.S.-European political, military, and intelligence cooperation are unique and cannot be easily replicated with other international actors. U.S. engagement in Europe also helps limit Russian, Chinese, or other possible malign influences.
At the same time, U.S. concerns exist about aspects of the transatlantic relationship. Despite ongoing overall U.S. support for NATO (including in Congress), successive U.S. Administrations have called for more European defense spending and some Members have supported and urged all allies to meet NATO's agreed defense spending guidelines. U.S. officials have long regarded certain EU regulatory approaches and other policies as barriers to trade. President Trump was particularly forceful in calling for greater European defense spending and in criticizing EU trade practices as unfair and damaging to U.S. interests.
Biden Administration Policies and War in Ukraine
Upon entering office in 2021, President Biden expressed strong U.S. support for NATO and its Article 5 mutual defense commitment and pledged to work with the EU and European governments on common global concerns. Biden Administration officials viewed cooperation with European democracies as key to countering challenges posed by China, Russia, and other authoritarian governments. European leaders welcomed the renewed U.S. commitment to multilateralism exemplified by President Biden's decisions to rejoin the World Health Organization and the Paris Agreement on combating climate change. At the same time, some tensions remained and new controversies emerged, including in relation to the U.S. troop withdrawal from Afghanistan in August 2021 and the Australia-UK-U.S. security pact for the Indo-Pacific (known as AUKUS) announced in September 2021.
Since 2022, Russia's war against Ukraine has dominated the transatlantic agenda. The Biden Administration, NATO, the EU, and nearly all European governments strongly condemn Russia's actions, steadfastly support Ukraine's territorial integrity, and have been providing military and economic aid to Ukraine. The United States and many NATO allies have increased military deployments to Central and Eastern Europe to deter further Russian aggression and reinforce the alliance's defense posture. The Biden Administration and House and Senate majorities also welcomed decisions by Finland and Sweden to seek NATO membership. (Finland joined NATO in April 2023 and Sweden in March 2024.)
The United States, the EU, the UK, and other allies have cooperated extensively on imposing sanctions on Russia and are considering options for using immobilized Russian sovereign assets to support Ukraine. Biden Administration officials have worked to help boost liquefied natural gas shipments to the EU, as part of U.S. efforts to help the EU reduce its dependency on Russian energy imports. At times, both U.S. and EU funding for Ukraine has faced political hurdles and periodic delays. Transatlantic differences could arise as U.S. and European officials begin to consider requirements for future peace negotiations or how to manage relations with Russia in the longer term.
Revitalizing U.S.-EU economic ties has been another Biden Administration priority. In 2021, the United States and the EU reached interim agreements to address disputes over civil aircraft subsidies and on U.S. steel and aluminum tariffs imposed on the EU. Also in 2021, the United States and the EU launched a new Trade and Technology Council (TTC) to focus on issues such as emerging technologies, supply chain security, and digital governance. The Biden Administration views the TTC, in part, as a vehicle to work with the EU on issues posed by China and other nonmarket economies; TTC meetings also have discussed U.S.-EU export controls and other sanctions on Russia. Additionally, the Biden Administration concluded a new commercial data transfer arrangement with the EU to replace the Privacy Shield framework (which the EU's top court invalidated in 2020 for not meeting EU data protection standards).
U.S. tax credits for the purchase of electric vehicles and other clean energy subsidies in P.L. 117-169 (commonly known as the Inflation Reduction Act of 2022, or IRA) sparked new trade frictions. The EU contended that some IRA measures could discriminate against EU firms and breach multilateral trade rules. Since March 2023, U.S. and EU officials have been negotiating a critical minerals agreement (CMA) to facilitate EU access to certain IRA tax credits for electric vehicles. U.S.-UK CMA negotiations also have been ongoing since June 2023. Some in Congress question the Administration's pursuit of CMAs as executive agreements without formal congressional approval. Some U.S. stakeholders and Members also voice concern that new EU digital rules could unfairly target U.S. technology firms.
Managing relations with China and addressing the Israel-Hamas conflict may test U.S.-EU relations as well. EU views on China in recent years have come to mirror more closely U.S. concerns about China's political and economic influence. At the same time, some EU officials and national governments appear wary about U.S.-China tensions and reluctant to antagonize a major economic partner. As for Hamas's October 2023 attacks on Israel and the ensuing conflict in the Gaza Strip, the Biden Administration and the EU have affirmed Israel's right to defend itself "in line with international law." President Biden and EU leaders also have expressed increasing concern about the humanitarian crisis in Gaza. U.S. and EU officials have cooperated on some aspects of the conflict—for example, establishing a maritime humanitarian aid corridor for Gaza—but divisions within the EU and some differences in U.S.-European perspectives may complicate policy coordination.
European concerns also exist about whether and to what extent the United States will remain a reliable international partner. Some European policymakers have long argued that Europe must be better prepared to address future challenges in Europe and beyond, and to do so on its own if necessary. For other Europeans, Russia's war against Ukraine has reinforced the importance of the transatlantic partnership and its combined political and economic clout.
Issues for Congress
Potential areas in transatlantic relations for deliberation in the 118th Congress include the following:
Also see CRS Report RS21372, The European Union: Questions and Answers; CRS In Focus IF10931, U.S.-EU Trade and Economic Relations; and CRS In Focus IF12575, U.S.-EU Trade and Technology Council: Background and Issues.