Trump gives oil ultimatum to EU

US President-elect Donald Trump has said the EU should reduce its trade gap by boosting purchases of American oil and gas, or it risks being hit with tariffs.

The US goods trade deficit with the EU stood at €156 billion ($162 billion) in 2023, according to Eurostat data.

In a post on Truth Social media platform, Trump wrote on Friday the EU should “make up their tremendous deficit with the US by the large-scale purchase of our oil and gas.”

“Otherwise, it is TARIFFS all the way!” he warned.

According to Eurostat, the US already supplied 47% of the EU’s liquefied natural gas (LNG) imports and 17% of the bloc’s oil purchases in the first quarter of 2024. Data shows US crude exports to Europe stand at around two million barrels per day, representing over half of the country’s total exports, with the rest going to Asia.

The Netherlands, France, Germany, Spain, Denmark, Italy, and Sweden are the biggest US energy importers, government data shows.

The European Commission (EC) responded to Trump’s warnings, saying it was ready to discuss how to deepen what it described as an already strong relationship, including in the energy sector.

“The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply,” an unnamed EC spokesperson was quoted as saying by Reuters.

The EU pledged to stop consuming Russian fuel following the escalation of the Ukraine conflict in 2022. Supplies of higher-cost US fuel have replaced much of the cheap pipeline gas that was previously delivered by Russia.

Data, however, shows that EU countries still continue to buy billions of euros’ worth of Russian gas each month. In 2024, the bloc is expected to import 10% more LNG from Russia than in 2023, according to energy analytics firm Kpler.

The bloc’s plans to completely phase out energy imports from the country by 2027 have been met with strong opposition from some EU members, particularly Hungary and Slovakia, that are still heavily reliant on the imports.

Trump, who takes office on January 20, has pledged to impose sweeping tariffs on several major US trading partners, including Canada, Mexico, and China.

He also has repeatedly said during his campaign that Europe would pay a heavy price for having run a large trade surplus with the US for decades.

EU exports are dominated by Germany, with key goods being cars, machinery and chemicals, which means Trump’s levies could wreak havoc on the bloc’s already struggling major economy.