Trump demands EU buy more US oil and gas or face tariffs

"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!!!" Trump wrote on his Truth Social network.

The US is the world’s largest producer of crude oil and the largest exporter of liquefied natural gas (LNG). Buyers of LNG, including the EU and Vietnam, have already discussed purchasing more fuel from the US, partly to counter the threat of tariffs.

EU officials and member states have prepared for a trade offensive since Trump’s election last month.

The bloc was largely caught off guard in 2017 when Trump, citing national security concerns during his previous presidential term, imposed tariffs on European steel and aluminum. Since then, the EU has reconsidered its trade doctrine and expanded its toolkit, giving it several options to counter coercive practices.

"We are well-prepared for the possibility that things will become different with a new US administration," said German Foreign Minister Annalena Baerbock after a G7 meeting in Italy in late November. "If the new US administration pursues an 'America first' policy in the sectors of climate or trade, then our response will be 'Europe united.'"

Last month, European Commission President Ursula von der Leyen proposed the idea that imports from the US could replace the bloc’s consumption of Russian LNG.

"LNG is one of the topics that we touched upon," von der Leyen said after a phone call with Trump. "We still get a lot of LNG from Russia and why not replace it by American LNG, which is cheaper for us and brings down our energy prices."

The US is already the largest LNG supplier to Europe, but imports from Russia remain firmly in second place. EU officials are seeking ways to limit Moscow’s role while the war against Ukraine continues, even though Russian pipeline gas and LNG are largely outside the scope of sanctions. The bloc will consider potential measures when discussing a new sanctions package next month, but strict restrictions remain challenging, according to an anonymous source familiar with the matter.

However, the EU remains prepared for possibly finding itself in a trade war with Washington. The EU's new anti-coercion instrument strengthens trade protection and allows the European Commission to impose tariffs or other punitive measures in response to politically motivated restrictions.

Ukraine does not intend to renew its contract for the transit of Russian gas after 2024.

The European Commission has already stated that, given that over 500 billion cubic meters of LNG are produced globally annually, replacing approximately 14 billion cubic meters of Russian gas transiting through Ukraine should have a minimal impact on natural gas prices in the EU.