The US president-elect, Donald Trump, has warned the EU that it will face trade tariffs on its exports to the US unless its member states buy more American oil and gas.
Trump reignited fears of a looming trade war between the US and the EU in his first public statement regarding trade since he was elected president in November.
“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. Otherwise, it is TARIFFS all the way!!!,” he said in a post on his social media site Truth Social.
The US is the world’s the largest producer of oil and has also emerged as the biggest supplier of liquefied natural gas (LNG) to the bloc since Russian supplies of pipeline gas to its European customers petered out after the full-scale invasion of Ukraine in early 2022.
This week, a US government study, commissioned by the Biden administration, found that increasing US exports of LNG could lead to a gas price spike of up to 30% for domestic gas customers.
The study, which analysed the economic, environmental and other costs of growing the US’s LNG capacity, also found serious consequences for the climate due to its high carbon emissions. The report is expected to complicate Trump’s pre-election promise to quickly approve more exports of LNG.
There is expected to be strong demand for US gas imports from EU economies. The European Commission president, Ursula von der Leyen, said last month that gas from the US could be used to replace the bloc’s remaining imports of Russian LNG as the EU struggles to end its reliance on Russian fossil fuels.
“We still get a whole lot of LNG via Russia, from Russia,” von der Leyen said. “And why not replace it with American LNG, which is cheaper, and brings down our energy prices.”
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The International Gas Union, which represents the global gas industry, warned the US that restricting its gas flows while global demand continues to rise could be “highly detrimental” to economies that are largely gas-importing, including the UK and the EU.