Trump's tariff threat: EU urged to boost US energy imports
Donald Trump warned the European Union about tariffs on its goods if it does not increase purchases of American oil and gas. The US is the largest producer of oil and exporter of LNG. The EU is preparing for possible changes in US trade policy.
President-elect Donald Trump threatened the European Union with imposing tariffs on its exported goods if member states do not increase purchases of American oil and gas. Trump emphasised that the EU must reduce its trade deficit with the US by purchasing more energy resources.
I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!! - Trump wrote on social media.
Europe responds
The United States is currently the largest oil producer and exporter of liquefied natural gas (LNG) in the world. In response to Trump's threats, the EU and other countries, such as Vietnam, are considering increasing imports of American LNG. In 2022, the US trade deficit with the EU was €126.3 billion.
- We are well-prepared for the possibility that things will become different with a new US administration - said German Foreign Minister Annalena Baerbock last month.
If the new US administration pursues an 'America first' policy in the sectors of climate or trade, then our response will be 'Europe united' - she added.
The President of the European Commission, Ursula von der Leyen, suggested in recent weeks that imports from the US could replace Russian LNG. Liquefied gas "is one of the topics that we touched upon" - she said after a phone conversation with Trump. - We still get a whole lot of LNG via Russia, from Russia. And why not replace it with American LNG, which is cheaper, and brings down our energy prices - she asked.
In the short-term, the US doesn’t have much more capacity to increase shipments. And since LNG is sold through long-term contracts, adding shipments to Europe would require original buyers of the gas to agree to divert its shipments to Europe — but that wouldn’t boost the amount being exported by the US. Over the longer term, more capacity will come on line with dozens of projects in the US currently in the works - Bloomberg stated.
