U.S. President-elect Donald Trump said on Friday that the European Union may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world’s largest economy.
The EU is already buying the lion’s share of U.S. oil and gas exports, according to U.S. government data, and no additional volumes are currently available unless the United States increases output or volumes are re-routed from Asia – another big consumer of U.S. energy.
“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,” Trump said in a post on Truth Social.
“Otherwise, it is TARIFFS all the way!!!,” he added.
The European Commission wasn’t immediately available for comment.
Trump has vowed to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the U.S. for decades.
Trump, who takes office on Jan. 20, has already pledged hefty tariffs on three of the United States’ largest trading partners – Canada, Mexico and China.
Most European oil refiners and gas firms are private and the governments have no say on where the purchases are coming from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.
The EU has steeply increased purchases of U.S. oil and gas following the block’s decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.
The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids or a fifth of global demand.
U.S. crude exports to Europe stand at over two million bpd representing over a half of U.S. total exports with the rest going to Asia. The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the U.S. government data.
The United States is also the world’s biggest gas producer and consumer with output of over 103 billion cubic feet per day (bcfd).
The U.S. government projects that U.S. exports of liquefied gas (LNG) will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of U.S. LNG exports, with the UK, France, Spain and Germany being the main destinations.
The EU had a trade surplus with the rest of the world in October of 3.9 billion euros, down from 8.4 billion euros in October 2023. The EU’s trade with the United States, the bloc’s top trading partner, showed an overall surplus of 20.3 billion euros in October, up from 16.8 billion 12 months earlier.
EU exports are dominated by Germany with key goods being cars, machinery and chemicals.
(Reporting by Rishabh Jaiswal, Mrinmay Dey in Bengaluru and Dmitry Zhdannikov in London and Jan Strupczewski in Brussels; Editing by Shri Navaratnam, Ros Russell, William Maclean)