Trump Threatens EU with Tariffs If US Doesn't Buy More Oil and Gas

Investing.com -- President-elect Donald Trump issued a warning that if European Union (EU) member countries do not increase their purchases of American oil and gas, EU exports could face U.S. tariffs. In a statement on Truth Social, Trump noted that the EU needs to buy more oil and gas to balance the significant trade deficit with the U.S., or else risk facing tariffs.

The U.S. is currently the world's largest crude oil producer and the top exporter of liquefied natural gas (LNG). Many LNG buyers, including those from the EU and Vietnam, have shown interest in purchasing more fuel from the U.S., partially to avoid potential tariffs.

According to a report by the Office of the U.S. Trade Representative, the trade deficit between the U.S. and the EU reached $131.3 billion in 2022. Following Trump's electoral victory last month, the EU began preparing for a potential trade assault.

The EU was caught off guard in 2017 during Trump's previous presidency when tariffs were imposed on European steel and aluminum under national security grounds. In response, the EU revitalized its trade doctrine and expanded its tools, offering various options against such measures.

German Foreign Minister Annalena Baerbock stated after the G7 meeting held in Italy at the end of November that the EU is prepared for possible changes under the new U.S. administration. If the U.S. administration prioritizes an "America First" policy in climate or trade sectors, the EU's response will be "United Europe."

European Commission President Ursula von der Leyen suggested last month that the EU could replace its LNG consumption from Russia with imports from the U.S. She indicated after a phone call with Trump that American LNG is cheaper and could lower European energy prices.