Trump Threatens EU With Tariffs If It Doesn’t Buy More American Oil and

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The president-elect is pressuring the European Union to buy more U.S. energy, threatening to impose tariffs over the trade imbalance.

President-elect Donald Trump has issued a warning to the European Union (EU), threatening to impose tariffs on the bloc unless it buys large enough quantities of American oil and gas to make up for its trade deficit with the United States.

Trump’s ultimatum, issued in a post on Truth Social on Dec. 20, is the president-elect’s latest effort to use the threat of tariffs to achieve policy objectives. In this case, Trump is targeting a trade imbalance between the EU and the United States, which was the subject of tensions during his first term.

“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 in his post.

EU Commission spokesperson Olof Gill said that the EU–U.S. trade relationship is highly integrated and complementary, adding that the bloc is prepared to hold discussions with the incoming Trump administration on how to address concerns and further strengthen ties.

“The EU and U.S. have deeply integrated economies, with overall balanced trade and investment. We are ready to discuss with President-elect Trump how we can further strengthen an already strong relationship, including by discussing our common interests in the energy sector,” Gill told The Epoch Times in an emailed statement.

“The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply,” Gill said, indicating that the EU’s focus on diversifying energy sources may align with Trump’s push for increased purchases of American oil and gas.

Top EU officials have indicated their intention to increase purchases of U.S. energy. Ursula von der Leyen, president of the European Commission, said in November that liquefied natural gas (LNG) imports from the United States could replace the bloc’s remaining imports of Russian LNG.

“We still get a whole lot of LNG via Russia, from Russia,” von der Leyen told reporters at a summit in Budapest, Hungary, on Nov. 8. “And why not replace it with American LNG, which is cheaper, and brings down our energy prices.”

In 2022, the U.S. goods and services trade deficit with the EU totaled $131.3 billion, according to the Office of the U.S. Trade Representative. That deficit is based on around $1.3 trillion in trade between the two regions, meaning it amounts to a roughly 10.1 percent imbalance. The U.S. goods deficit with the EU that year was $202.5 billion, which was partly offset by the $71.2 billion services surplus, leading to the $131.3 billion total U.S. deficit figure.

Gill pointed to more recent figures showing that the trade deficit in 2023 had shrunk to roughly $57 billion. The United States exported approximately $381.2 billion worth of goods to the EU in 2023, while importing $552.5 billion, resulting in a U.S. goods deficit of $171.4 billion. At the same time, the United States exported $436.0 billion worth of services to the EU, while importing $321.6 billion, yielding a services trade surplus of $114.4 billion, which offsets most of the goods deficit for a total trade gap of $57 billion in favor of the EU.

Trump, who has dubbed himself “Tariff Man,” has consistently championed tariffs as a versatile tool for policy negotiations. He has said that tariffs protect domestic industries from unfair foreign competition and encourage the reshoring of manufacturing jobs.

During his first term, Trump frequently wielded tariffs—or the threat of them—as a bargaining chip to renegotiate trade deals he deemed unfavorable to American businesses.

“In 2018, Donald Trump threatened to impose tariffs on European automobiles to compel the EU to reduce trade barriers and increase imports of U.S. soybeans and liquefied natural gas,” Sebestyen Geza, head of the Economic Policy Centre at the Mathias Corvinus Collegium, told The Epoch Times in November.

“The following year, he announced plans for escalating tariffs on all Mexican imports to pressure Mexico into taking stronger measures against illegal immigration. Once he achieved his objectives, the tariffs were suspended.”

Most recently, Trump warned Canada and Mexico of impending 25 percent tariffs unless they took decisive steps to curb the flow of fentanyl and illegal immigrants across their borders into the United States.

Critics of Trump’s proposed tariffs say that they could lower America’s economic output and raise prices for U.S. consumers of imported goods—such as Canadian lumber—as well as of products that use those imports as inputs, such as houses.

Supporters contend that the longer-term benefits of strengthened domestic production and reduced dependence on foreign imports justify the short-term economic costs of tariffs. Others, like Geza, say that Trump’s threat of tariffs is more of a negotiating tactic to achieve certain policy outcomes.

Meanwhile, a recent analysis of Trump’s proposed tariffs by the nonpartisan Congressional Budget Office found that they could significantly reduce the U.S. federal deficit over the next decade, while their impact on consumer prices and economic output would be relatively modest.