President-elect Trump has issued a stark warning to the European Union: reduce the trade deficit with the United States by purchasing more American oil and gas, or face increased tariffs. This ultimatum came through a post on Truth Social following a conversation with German Chancellor Olaf Scholz. With a goods and services trade deficit of $131.3 billion in 2022 between the US and EU, tensions are high.
Responding to Trump's threats, European Commission representative Olof Gill noted that the EU aims to reduce its dependency on Russian energy sources while maintaining a balanced trade relationship with the U.S. This dialogue unfolds as the EU considers replacing Russian liquefied natural gas (LNG) imports with cheaper alternatives from the U.S., an initiative supported by European Commission President Ursula von der Leyen last month.
The U.S. is currently the largest supplier of LNG and oil to Europe, contributing significantly to the continent's energy needs. In recent reports, it was highlighted that approximately 15% of EU's oil imports in the third quarter came from the U.S., making up nearly half of its LNG imports in the first half of 2024. However, challenges loom as Bloomberg points out that America's capacity to increase LNG shipments is limited in the short term due to existing long-term contracts.
As discussions continue, financial markets have shown optimism; evidenced by a 0.3% rise in euro trading, suggesting confidence that Europe can meet Trump's demands without resorting to tariffs. Nonetheless, EU officials have prepared for all eventualities, including retaliatory measures against American goods should tariffs
Responding to Trump's threats, European Commission representative Olof Gill noted that the EU aims to reduce its dependency on Russian energy sources while maintaining a balanced trade relationship with the U.S. This dialogue unfolds as the EU considers replacing Russian liquefied natural gas (LNG) imports with cheaper alternatives from the U.S., an initiative supported by European Commission President Ursula von der Leyen last month.
The U.S. is currently the largest supplier of LNG and oil to Europe, contributing significantly to the continent's energy needs. In recent reports, it was highlighted that approximately 15% of EU's oil imports in the third quarter came from the U.S., making up nearly half of its LNG imports in the first half of 2024. However, challenges loom as Bloomberg points out that America's capacity to increase LNG shipments is limited in the short term due to existing long-term contracts.
As discussions continue, financial markets have shown optimism; evidenced by a 0.3% rise in euro trading, suggesting confidence that Europe can meet Trump's demands without resorting to tariffs. Nonetheless, EU officials have prepared for all eventualities, including retaliatory measures against American goods should tariffs
