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

US President-elect Donald Trump has issued a warning to the European Union, threatening tariffs if its member countries do not increase their purchases of American oil and gas.

“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 declared on Truth Social.

The United States, currently the world’s largest crude oil producer and leading exporter of liquefied natural gas (LNG), has already seen interest from buyers like the EU and Vietnam in securing more American energy resources to potentially avoid the imposition of tariffs.

EU officials and member states have been bracing for a potential trade conflict following Trump’s recent election victory. The bloc previously faced tariffs on steel and aluminum during Trump’s earlier presidency, prompting a reevaluation of its trade strategies and the expansion of its countermeasures against coercive trade practices.

German Foreign Minister Annalena Baerbock, speaking after a G7 meeting in Italy last month, addressed the possible challenges under the new administration. “If the new US administration pursues a ‘United States first’ policy in the sectors of climate or trade, then our response will be ‘Europe united,’” she said.

European Commission President Ursula von der Leyen has suggested that US LNG could replace Russian imports, especially as the EU seeks to reduce its reliance on Moscow amid the ongoing war in Ukraine. “We still get a whole lot of LNG via Russia, from Russia. And why not replace it with American LNG, which is cheaper, and brings down our energy prices,” von der Leyen said after a conversation with Trump.

While the US is already Europe’s largest LNG supplier, Russia remains a significant source of imports. EU officials are exploring measures to reduce Moscow’s influence, but stringent restrictions on Russian energy remain challenging.

To prepare for potential trade disputes with Washington, the EU has bolstered its defenses through measures like the anti-coercion instrument, which allows the bloc to impose tariffs or punitive measures in response to politically motivated trade restrictions. Additionally, the EU’s foreign subsidies regulation enables action against foreign companies benefiting from unfair state subsidies.

Trump has frequently criticized the EU over issues ranging from defense spending to the trade deficit. He has targeted countries with trade imbalances, including Canada, China, and the EU. Europe, a major destination for US LNG and crude oil exports, is already central to American energy trade, with more than half of US LNG deliveries going to the continent last year.

As the EU continues to prepare for possible trade confrontations, Trump’s aggressive trade stance highlights the challenges ahead for transatlantic relations under his administration.