Trump threatens EU with tariffs if the block doesn't buy more US oil, gas

Investing.com -- President-elect Donald Trump has issued a warning to the European Union (EU) that its exports could face US tariffs if its member states don't increase their purchases of American oil and gas. Trump made this statement on Truth Social, indicating that the EU must offset its large trade deficit with the US by buying more of its oil and gas, or face tariffs.

The US is currently the world's leading producer of crude oil and the largest exporter of liquefied natural gas (LNG). Several LNG buyers, including the EU and Vietnam, have expressed interest in buying more fuel from the US, partially to avoid potential tariffs.

In 2022, the US goods and services trade deficit with the EU was $131.3 billion, as reported by the office of the US Trade Representative. Following Trump's election victory last month, the EU has been preparing for a potential trade offensive.

The EU was caught off-guard in 2017 when Trump imposed tariffs on European steel and aluminum, citing national security concerns during his previous term as president. In response, the EU has revamped its trade doctrine and broadened its tools, providing a variety of options to counter such measures.

German Foreign Minister Annalena Baerbock stated after a Group of Seven meeting in Italy in late November that the EU is ready for potential changes under the new US administration. If the US administration prioritizes its 'America first' policy in climate or trade sectors, the EU's response will be 'Europe united.'

European Commission President Ursula von der Leyen suggested last month that the EU could replace its consumption of Russian LNG with imports from the US. She mentioned this after a phone call with Trump, stating that American LNG is cheaper and could lower European energy prices.

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Source: Investing.com