The negative balance in the goods trade with the United States has weakened in recent quarters after rising sharply since 2021, as revealed by new DNB balance of payments figures. In the third quarter of 2024, the balance was € -3.7 billion.
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The US is one of the Netherlands’ five largest trading partners when it comes to importing and exporting goods. In total, goods worth €8.4 billion were exported from the Netherlands to the US in the third quarter of 2024, representing 5% of total Dutch exports. This was offset by a total of €12.1 billion in imported goods, or 9% of total imports. The Netherlands thus imports more from the US than it exports, resulting in the negative goods balance of € -3.7 billion.
At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.
President-elect Donald Trump has announced plans to hike import tariffs. This will make foreign products more expensive in the US with the aim of protecting domestic production. This will not only impact Dutch exports to the US, but, because of the two nations’ strong economic interconnectedness, may also have other consequences for the Netherlands.
Incidentally, the picture sketched by the goods trade with the US is different from the overall picture for the Netherlands. In the third quarter of 2024, the Netherlands had a goods account surplus of €22.3 billion. This means the country exports more goods worldwide than it imports.
The negative goods trade balance with the US rose sharply starting in 2021, but this trend has weakened in recent quarters.
The negative goods balance is partly driven by trade in energy products; the prices of these products have fluctuated widely in recent years. The Netherlands generally imports more energy from the US than the other way around.
In contrast, re-exports and merchanting have a positive impact on the balance. This includes goods that are only transported through the Netherlands (re-exports) and goods bought by the Netherlands abroad and then resold to the US (merchanting). Exports to the US of these goods have been on the rise in recent quarters.
Besides goods, the Netherlands also imported more services from the US in the third quarter of 2024 (€11.1 billion) than the other way round (€6.9 billion). This includes, for example, consultancy and IT services.
The US is not only one of the Netherlands’ largest trading partners, but also the country’s largest direct investor. Direct investments are transactions of a permanent nature in which the investor holds a stake of at least 10% in the (subsidiary) company. This makes direct investment a stable measure of international interconnectedness.
At the end of 2023, US direct investments in the Netherlands amounted to €540 billion, excluding so-called special purpose entities, also known as letterbox companies. Total direct investment from the Netherlands in the US amount to €306 billion (excluding special purpose entities), making the US the largest destination after the United Kingdom. Both inward and outward direct investment are mainly in financial institutions and firms focused on wholesale, retail and business services.
These direct investments involve hefty income streams, notably dividends and retained earnings. With the exception of 2021, income flows to the US are substantially larger than the other way around. In fact, over the past five years, more than €125 billion more in total profits have flowed from the Netherlands to the US than vice versa. This is caused by large US multinationals channelling their international profits back to their headquarters through subsidiaries in the Netherlands.
The new balance of payments figures further show that the Netherlands’ external assets increased by €152 billion in the third quarter of 2024, to a total of €609 billion. The net external asset position is the balance of all receivables Dutch parties have with parties abroad, and the receivables foreign parties have with Dutch parties.
This rise is mainly due to stock market developments, especially price declines of shares issued on the Dutch stock exchange and held by foreign investors. This decreases the claim foreign countries have on the Netherlands, causing an increase in external assets. In addition, rising stock prices abroad caused increases in the value of Dutch investors’ cross-border holdings.
The current account balance was €27 billion, up more than €4 billion from the third quarter last year. This balance is the difference between income from abroad and expenditure abroad in the current account. Underlying this is an increase in the services account balance, with exports rising more strongly than imports, and in the primary income balance.
Table 12.1: Balance of payments from 2008Q4 onwards
Table 12.12: Net external assets from 2008Q4 onwards
Table 12.16: Foreign direct investment in the Netherlands: positions
Table 12.17: Dutch direct investment abroad: positions
Dashboard: Balance of Payments
Dashboard: External assets
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