Trump says EU will face tariffs unless it buys more U.S. oil and gas

MW Trump says EU will face tariffs unless it buys more U.S. oil and gas

By Louis Goss

Donald Trump has threatened to impose import tariffs on the European Union unless it carries out large scale purchases of American oil and natural gas.

In a post on his social media platform Truth Social, Trump said: "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 has previously said he would impose a 10% tariff on all goods imported into the U.S. and place 60% tariffs on all imports from China, citing concerns about America's growing trade deficit including with the EU.

In November, European Central Bank (ECB) president Christine Lagarde said the EU should seek to "negotiate" with Trump to avoid a trade war, including by offering to buy more American weapons and liquefied natural gas $(LNG)$.

In 2022, the U.S. imported $723.3 billion worth of EU goods and exported $592 billion of its own goods to the European bloc, leaving it with a $131.3 billion trade deficit, U.S. government figures show.

The U.S. is now the EU's largest trade partner ahead of China and the world's biggest buyer of EU goods as the result of sharp increase in European exports to America that has seen the bloc's trade surplus with the U.S. grow from EUR42 billion in 2009 to EUR155 billion in 2023.

The EU's switch away from Russian natural gas since the start of the Ukraine war in February 2022 has driven up European imports from America, as the bloc has replaced supplies of pipeline gas from Russia with U.S. oil and LNG.

The EU is heavily reliant on energy imports and continues to import the majority of its primary energy, including from the U.S. In the first quarter of 2024, the U.S. took a leading position as the top source of the EU's oil and LNG imports, with exports from America accounting for 17.1% of all petroleum oil and 47.4% of all LNG imported into the EU.

Peel Hunt's analysts, led by Kallum Pickering, said: "The EU - which is continuing to adjust to the shift away from Russian oil and gas - may be open to a deal that secures a steady additional inflow of US energy."

Prices for international oil benchmark Brent crude (BRN00) were down 0.4 per cent at $72.61 a barrel on Friday. West Texas Intermediate (WBS00) futures were down 0.4 per cent at $69.14 a barrel.

-Louis Goss

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December 20, 2024 05:50 ET (10:50 GMT)

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