Trump threatens tariffs if EU doesn’t buy more US oil and gas

President-elect Donald Trump threatens tariffs on the European Union. Its exports will get hit with US tariffs if its member states don’t buy more American oil and gas.

“I told the European Union that they must make up their tremendous deficit with the United States. This is by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!,”. he said on Truth Social.

The US is the world’s largest producer of crude oil and the biggest exporter of liquefied natural gas. LNG buyers — including the EU and Vietnam — have already talked about purchasing more fuel. They are planning to get it from the US as part to deter the threat of tariffs.

The euro traded 0.3% stronger at $1.0398 Friday in a sign investors believe the bloc will be able to meet its demands and avoid punitive measures.

The US goods and services trade

The US goods and services trade deficit with the EU was $131.3 billion in 2022, according to the office of the US Trade Representative, and the EU has been bracing for a trade offensive ever since Trump’s election victory last month.

The bloc was largely caught off-guard in 2017 when Trump, citing national security concerns in his previous term as president, levied tariffs on European steel and aluminum. Since then, the EU has reinvented its trade doctrine and expanded its toolbox, giving it a range of options to counter coercive practices.

“We are well-prepared for the possibility that things will become different with a new US administration. German Foreign Minister Annalena Baerbock said after a Group of Seven meeting in Italy in late November. “If the new US administration pursues an ‘America first’ policy in the sectors of climate or trade, then our response will be ‘Europe united.’”

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Source: Bloomberg

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