Trump Demands EU Buy More US Oil and Gas or Faces Tariffs

US President-elect Donald Trump has threatened the European Union with tariffs on European imports if its member states do not buy more US oil and gas.

‘I told the European Union that they have to make up their huge deficit with the United States by buying our oil and gas on a large scale. Otherwise, it will be tariffs!’ he said on Truth Social.

The United States is the world's largest producer of crude oil and the largest exporter of liquefied natural gas (LNG). LNG buyers - including the EU and Vietnam - have already talked about buying more fuel from the US, partly to contain the threat of tariffs. 

EU officials and member states have been preparing for a trade offensive since Trump won the election last month.

The EU was largely caught off guard in 2017 when Trump, citing national security concerns during his previous presidential term, imposed tariffs on European steel and aluminium. 

Since then, the EU has rethought its trade doctrine and expanded its toolkit to provide a range of options to counter coercive practices.

‘We are well-prepared for the fact that everything will change with the new US administration,’ said German Foreign Minister Annalena Burbock after the Group of Seven (G7) meeting in Italy in late November. ‘If the new US administration pursues an ‘America first’ policy in the climate or trade sectors, our response will be ‘Europe as one’.’

The EU's new anti-coercion instrument strengthens trade defences and allows the Commission to impose tariffs or other punitive measures in response to such politically motivated restrictions.

The EU has also adopted the so-called foreign subsidies regulation, which allows the Commission to prevent foreign companies that receive unfair government handouts from participating in public tenders or M&A deals in the bloc, among other measures.

Trump has many grievances with the EU, and has criticised Europe for insufficient defence spending and the US-EU trade deficit. 

Trump has threatened tariffs on countries from China to Canada, and has particularly focused on countries that run trade deficits with the US. Europe is already a major destination for US LNG, with more than half of the continent's shipments last year.

The United States has also become a major exporter of crude oil over the past decade or so, sending so-called light and medium density grades to Canada as well as to countries in Europe and Asia.