The theory relevant to the study of matter in equilibrium with the radiation field is thermal quantum electrodynamics (TQED). We present a formulation of the theory, suitable for nonrelativistic fluids, based on a joint functional integral representation of matter and field variables. In this formalism cluster expansion techniques of classical statistical mechanics become operative. They provide an alternative to the usual Feynman diagrammatics in many-body problems, which is not perturbative with respect to the coupling constant. As an application we show that the effective Coulomb interaction between quantum charges is partially screened by thermalized photons at large distances. More precisely one observes an exact cancellation of the dipolar electric part of the interaction, so that the asymptotic particle density correlation is now determined by relativistic effects. It still has the r(-6) decay typical for quantum charges, but with an amplitude strongly reduced by a relativistic factor.