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US President-elect Donald Trump has warned the European Union that it must commit to purchasing “large-scale” amounts of US oil and gas or face tariffs, in his first trade offensive against Brussels since his election victory.
The European Union is desperate to avoid a trade war with… Trump It has spent the past month racing to map out potential ways to avoid tariffs by increasing purchases of US goods such as liquefied natural gas or agricultural products.
“I've told the EU that they must make up their massive deficit with the US by massively purchasing our oil and gas. Otherwise it's tariffs all the way!!!” Trump wrote on his Truth Social platform on Friday.
Trump's threat follows initiatives already put forward by Brussels suggesting member states could buy more US liquefied natural gas, which has been a lifeline for the bloc after Russia squeezed fossil fuel supplies following its full-scale invasion of Ukraine.
European Union Officials have also begun working on potential trade retaliation if Trump moves to impose tariffs, but capitals are eager to avoid an escalating economic conflict with the White House given other areas that depend on the United States, such as defense.
European Commission President Ursula von der Leyen said in November that the European Union would consider buying more gas from the United States.
“We still get a lot of LNG from Russia, so why not replace it with American LNG, which is cheaper for us and brings down our energy prices,” she told reporters.
“It sounds strange as a ‘threat’ given that von der Leyen hinted at the possibility of doing precisely that,” one EU official noted.
The United States is already the largest supplier of liquefied natural gas and oil to the European Union. In the first half of 2024, the United States provided about 48 percent of the bloc's LNG imports, compared to 16 percent from Russia.
America supplied 15 percent of the European Union's oil imports in the third quarter, according to data from Eurostat, the European Union's statistical agency.
Trump threatened to impose a comprehensive tariff of up to 20% on all non-Chinese American imports. Last month, European Central Bank President Christine Lagarde urged Europe's political leaders to cooperate with him on tariffs and buying more products made in the United States.
Energy analysts said the United States would need to expand LNG production to supply more to the European Union.
“The main problem is that the United States does not have spare LNG capacity to send to Europe at the moment,” said Florence Schmidt, an energy strategist at Rabobank, adding that European countries would have to outbid Asian buyers.
During Trump's first presidency, then-European Commission President Jean-Claude Juncker offered to buy more US gas to stem trade war threats.
Analysts at the Brussels-based Bruegel think tank said the EU should back any offers to buy more US products “with a credible threat of retaliation that could be carried out if the US decides to impose tariffs on EU exports.”
Prices of Brent crude oil, the global oil standard, fell 0.4 percent to $72.61 per barrel on Friday. West Texas Intermediate crude futures fell 0.4 percent to $69.14 per barrel.
Trump's warning comes amid a high-stakes scramble in Washington to secure continued funding for the US government. A potential shutdown loomed Friday after a Trump-backed plan that would have suspended the debt ceiling was voted on in the House of Representatives.
