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US President-elect Donald Trump delivers a speech at Mar-a-Lago in Palm Beach, Florida, US, on December 16, 2024.
Brian Snyder | Reuters
US President-elect Donald Trump said Friday that he told the European Union it must narrow its trade gap with the United States through oil and gas purchases or face tariffs.
“I told the European Union that they must make up their tremendous deficit with the United States by purchasing our oil and gas on a large scale. Otherwise it will be TARIFFs in every way,” Trump posted on his Truth Social platform shortly after 1 in the morning. Eastern time.
According united states figuresThe country’s trade deficit in goods and services with the European Union was $131.3 billion in 2022.
“The EU and the US 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,” said the European. Commission spokesman Olof Gill told CNBC in response to Trump’s comments.
“The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply,” Gill added.
A senior EU diplomat, who did not want to be identified due to the sensitivity of the issue, told CNBC that they were not surprised by Trump’s comment on Friday and that energy was a “good option” for buying more American products.
Another EU official, who also did not want to be identified for the same reason, told CNBC that German Chancellor Olaf Scholz spoke with Trump last night.
The United States is the largest recipient of goods from the EU and represents almost a fifth of the bloc’s exports. USA higher trade deficit with the EU is in machinery and vehicles, with a gap that will total 102 billion euros (106 billion dollars) in 2023. In energy, Washington had a trade surplus with the European bloc worth 70 billion euros; also has a significant trade surplus in services.
The United States is the world’s top oil producer, accounting for 22% of global supply in 2023, according to the U.S. Energy Information Administration, which predicts record crude oil production in 2024. Producers anticipate even higher supply levels in a deregulatory environment under Trump.
The EU had already indicated that it expects to buy more American energy in the coming years. Last month, the president of the European Commission, Ursula von der Leyen told reporters that replacing Russian imports of liquefied natural gas (LNG) with US volumes would be cheaper, and that the EU would seek to engage and negotiate on the issue when Trump takes office in 2025.
European stock markets fell sharply on Friday morning, while the euro strengthened 0.2% against the US dollar to $1.038.
EU retaliation?
Trump has threatened to impose sweeping tariffs on US trading partners. including China, Mexico and Canada a signature part of his presidential campaign, and he has continued the narrative as he prepares to take office, despite warning from economists of risks for internal inflation.
Analysts say there is great uncertainty about the extent of tariffs that Trump will be willing – or able – to apply, and how much of his rhetoric is a starting point for reaching agreements.
His latest comment comes after EU heads of state held their last meeting of the year on Thursday, during which the issue of relations between Europe and the United States was discussed.
“The message is clear: the European Union is committed to continuing to work with the United States, in a pragmatic way, to strengthen transatlantic ties,” said the president of the European Council, António Costa, after the meeting.
Enrico Letta, former prime minister of Italy and dean of IE’s School of Politics, Economics and Global Affairs, told CNBC’s “Squawk Box Europe” on Friday that the EU had to be prepared to retaliate against Trump’s threat.
“I think it’s a transactional approach, we have to respond to this transactional approach. (Trump) mixes energy and tariffs on goods, manufacturing, etc. I think it’s wrong because the two issues are completely different,” Letta said.
“If the agreement is proposed by Trump (such an asymmetric agreement on issues that are not linked to each other) I think we have to do the same.”
“Considering that the most asymmetric part is the relationship on the financial side, we have to start considering that perhaps responding on the financial side could be a solution,” he said.
Before the US elections in November, EU officials spent months preparing for a lurch towards American protectionism and for a more conflictive relationship with the White House, in the event of a Trump victory. The EU has also took steps to strengthen their relationship with the United Kingdom, which left the bloc in 2020, as protection against possible clashes over trade and defense.
