Trump Urges EU to Increase U.S. Energy Imports, Threatens Tariffs
Trump Urges EU to Increase U.S. Energy Imports, Threatens Tariffs
Trump Urges EU to Increase U.S. Energy Imports, Threatens Tariffs
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Trump Urges EU to Increase U.S. Energy Imports, Threatens Tariffs

U.S. President-elect Donald Trump has issued a stern warning to the European Union (EU), urging the bloc to ramp up its purchases of U.S. oil and gas or face steep tariffs on exports, including cars and machinery.

“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,” Trump wrote on Truth Social. “Otherwise, it is TARIFFS all the way!!!”

The EU already sources nearly half of its liquefied natural gas (LNG) imports and 17% of its oil imports from the U.S., according to Eurostat data for the first quarter of 2024. However, Trump’s push comes as the U.S. reaches export capacity, with pledges to boost production requiring significant investments in infrastructure.

 

Tariff Risks and Trade Deficit

Trump, set to take office on January 20, 2025, has outlined plans to impose a 10% tariff on global imports and a 60% tariff on Chinese goods. These measures aim to reduce the $208.7 billion goods trade deficit with the EU, though trade experts warn such actions could disrupt markets, raise costs, and invite retaliation.

The automotive industry is a particular focus, with German and Italian car exports currently subject to a 2.5% U.S. tariff, which could quadruple under Trump’s plans.

EU’s Response and Energy Transition

The European Commission signaled its openness to discussions, emphasizing its commitment to diversifying energy sources and phasing out reliance on Russian imports following the 2022 Ukraine invasion.

“The EU is committed to strengthening its already robust energy partnership with the U.S. while ensuring a transition to renewable energy,” an EU spokesperson said.

While U.S. crude exports to Europe, currently around 2 million barrels per day (bpd), account for over half of total U.S. crude exports, analysts note limited capacity for increased imports.

Richard Price, an oil markets analyst, highlighted that Europe is nearing its maximum capacity for U.S. crude and suggested that upcoming refinery closures in 2025 would further constrain demand.

Energy Market Dynamics

Despite record oil production exceeding 20 million barrels per day and significant LNG output, further export growth would depend on expanding LNG terminals and other infrastructure.

Alex Froley, an LNG analyst at ICIS, noted that while the EU could move to ban remaining Russian LNG imports, securing alternative supplies from the U.S. would be challenging due to logistical and financial constraints.

Long-Term Outlook

Experts remain cautious about the longevity of current demand for U.S. oil and gas in Europe, given the global shift toward renewable energy. William Reinsch, a trade specialist at the Center for Strategic and International Studies, observed that private companies, not governments, dictate energy purchase decisions, often prioritizing price and efficiency.

“While the EU may negotiate increased imports to avoid tariffs, the long-term trajectory is toward reduced fossil fuel reliance,” Reinsch said.

As Trump prepares to take office, his policies could reshape global energy markets and trade dynamics, setting the stage for potentially contentious negotiations between the U.S. and its international partners.

($1 = 0.9623 euros)

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