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Trump threatens EU with tariffs over oil and gas imports | World News
President-elect Donald Trump has warned the European Union to increase imports of US oil and gas or face tariffs on EU exports such as cars and machinery. Trump called the EU’s $208.7 billion goods trade deficit with the US in 2023 unacceptable, urging the bloc to buy more American energy to help balance trade.
“I told the European Union they must make up their tremendous deficit with the United States by buying large amounts of our oil and gas,” Trump posted on Truth Social. “Otherwise, it is TARIFFS all the way!”
EU’s response
The European Commission responded by expressing readiness to discuss ways to strengthen trade ties, including in the energy sector.
A spokesperson highlighted the EU’s ongoing efforts to phase out Russian energy imports and diversify its sources of supply. Currently, the US supplies about 47% of the EU’s liquefied natural gas (LNG) imports and 17% of its oil imports.
The US is already exporting oil and gas at full capacity, making it difficult to increase shipments in the short term.
Analysts believe the EU could negotiate by committing to larger purchases of US energy, which it already needs to replace Russian supplies. However, European oil refiners and gas firms, which are mostly privately owned, prioritize cost and efficiency over political decisions, complicating such agreements.
US-EU trade tensions
The EU’s trade surplus with the US is its second largest after China’s.
While the US runs a surplus with the EU in services, Trump has focused primarily on goods, particularly the automobile sector. European car exports to the US, mainly from Germany and Italy, currently face a 2.5% tariff that could rise sharply if Trump enforces his threats.
What about the current and future energy imports?
The EU has significantly increased its energy imports from the US since 2022, when it began cutting reliance on Russian supplies following Moscow’s invasion of Ukraine.
In 2023, Europe accounted for two-thirds of US LNG exports, with major buyers including the UK, France, Spain, and Germany. US crude oil exports to Europe, currently at 2 million barrels per day, represent more than half of total US oil exports.
Any further increase in US energy exports would require substantial investment in infrastructure, such as LNG terminals, which may not align with Europe’s transition to renewable energy.
Analysts warn that private companies may hesitate to invest heavily in fossil fuel infrastructure due to declining long-term demand.
(With inputs from Reuters)
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