European firms tend to be smaller and less productive than US firms. Qualitative and survey-based evidence suggests that one key reason is the remaining barriers fragmenting the EU’s single market. This column argues that gravity-based trade estimates can help quantify the problem but are sensitive to the data used. Intra-EU trade barriers are estimated to be between two to three times as large as between US states, with simulations suggesting that fully closing the gap with intra-US trade