Donald Trump demands that the EU buy US oil and gas or face tariffs
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US President-elect Donald Trump has warned the EU that it must commit to buying large quantities of US oil and gas or face tariffs, in his first trade attack against Brussels since then. since he was elected.
The EU is trying to avoid a trade war with Trump and has spent the past month racing to find potential ways to avoid tariffs by increasing purchases of American goods such as liquid natural gas (LNG) or agricultural products.
“I told the European Union that it must make up its enormous deficit with the United States by large-scale purchases of our oil and gas. Otherwise it’s pure TARIFF!!!” Trump wrote on his Truth Social platform on Friday.
Trump’s threat follows suggestions made by Brussels that member states could buy more US LNG, which is a lifeline for the bloc after Russia tightened fossil fuel supplies after full-scale invasion of Ukraine.
EU Officials have also begun studying potential trade retaliation if Trump moves to impose tariffs, but the capitals want to avoid growing economic conflict with the White House given the reliance on other sectors. into the US, such as defense.
European Commission President Ursula von der Leyen said in November that the EU would consider buying more gas from the US.
“We still get a lot of LNG from Russia and why not replace it with American LNG, which is cheaper for us and lowers our energy prices,” she told reporters.
One EU official commented: “It seems odd that as a ‘threat’ von der Leyen alluded to the possibility of doing exactly this.”
The US is currently the largest supplier of LNG and oil to the EU. In the first half of 2024, the US provided about 48% of the bloc’s LNG imports, compared with 16% from Russia.
According to Eurostat, the EU’s statistics agency, the US provided 15% of the EU’s oil imports in the third quarter.
Trump has threatened to impose blanket tariffs of up to 20% on all non-Chinese imports. Last month, European Central Bank President Christine Lagarde called on European political leaders to cooperate with him on tariffs and buying more products made in the US.
Energy analysts say the US will need to expand LNG production to supply more to the EU.
“The main problem is that the US does not have spare LNG capacity to send to Europe at the moment,” said Florence Schmit, energy strategist at Rabobank, adding that European countries would have to pay Higher prices for Asian buyers.
During Trump’s first term as president, then-European Commission President Jean-Claude Juncker offered to buy more American gas to stave off the threat of a trade war.
Analysts at Brussels-based consultancy Bruegel said the EU should support any offer to buy more US goods “with a credible threat of retaliation that could be carried out if the US decides to impose tariffs on with EU exports”.
International benchmark Brent crude oil prices were down 0.4% at $72.61 a barrel on Friday. West Texas Intermediate futures were down 0.4% at $69.14 a barrel.
Trump’s warning comes in the context of Washington’s struggle for continuous funding for the US government. A shutdown was possible on Friday after a Trump-backed plan to suspend the debt ceiling was voted down by the House.
