Trump adds Europe to list of US trade partners he is threatening with tariffs
US President-elect Donald Trump on Friday added the 27 countries that make up the European Union to the list of trade partners he is threatening with tariffs — unless the group takes steps to import more US goods.
“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,” Mr Trump posted shortly after 1am on social media. “Otherwise, it is TARIFFS all the way!!!”
In 2023, the United States’ trade imbalance with the EU on goods was 209 billion dollars (£166 billion), according to the US Census Bureau. There were 576 billion dollars (£458 billion) in imports from Europe and 367 billion dollars (£292 billion) in exports from the United States.
Mr Trump’s transition team did not respond to questions seeking greater clarity on the message, which for all its bluntness was unclear on next steps.
When Mr Trump threatened Canada and Mexico with 25% tariffs in November, the leaders of both countries spoke to him to try to resolve any tensions. But the European Union lacks a single figure who can make the purchase commitments of natural gas and oil on behalf of its 27 member states that Mr Trump is seeking.
EU Commission spokesman Olof Gill said in reaction to Mr Trump’s post that “we are ready to discuss with President-elect Trump how we can further strengthen an already strong relationship, including by discussing our common interests in the energy sector”.
Mr Gill noted that the EU is already “committed to phasing out energy imports from Russia and diversifying our sources of supply. We’re not going to go into any details about what that might entail in the future, given that the new administration isn’t even in place yet”.
Scott Lincicome, a vice president at the libertarian Cato Institute, said it was difficult to see what Mr Trump was trying to say relative to European trade, given that natural gas exports to the continent are already up after Russia’s 2022 invasion of Ukraine.
“What we really need to chalk all of this up to is Trump laying the groundwork for future negotiations,” Mr Lincicome said. “This is for better or worse a lot of what we’re going to see for the next four years.”
While there is a 209 billion-dollar trade imbalance, a more complicated relationship lies beneath those numbers. A company such as German automaker BMW can import parts needed to assemble vehicles at its factory in South Carolina, such that the trade totals also reflect the flow of goods within European companies that employ US workers.
More than half of the liquified natural gas (LNG) imported by the EU and the UK in 2023 came from the United States, according to the US Energy Information Administration. The volume of LNG going to the EU and UK has tripled since 2021.
On Tuesday, Energy Secretary Jennifer Granholm issued a statement based on a new study that unfettered exports of LNG could increase prices domestically and increase carbon emissions.
Mr Trump ran for president on the idea that increased oil and natural gas production would reduce costs for US voters who were left frustrated by a 2022 inflationary spike that still lingers.
Mr Trump’s demands on Europe to buy more oil and natural gas were not especially new. He also made them during his initial term as president and in 2018 reached a deal with Jean-Claude Juncker, then-president of the European Commission, to sell more LNG to Europe.
The problem with that agreement, as noted by the University of Pennsylvania’s Kleinman Centre for Energy Policy, is that the US “cannot force companies to send products to a specific region or country” and the EU cannot force its members to buy American fossil fuels.