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US president-elect Donald Trump has warned the EU that it should commit to purchasing “giant scale” quantities of US oil and fuel or face tariffs, in his first commerce salvo towards Brussels since his election victory.
The EU is determined to keep away from a commerce battle with Trump and has spent the previous month racing to attract up potential methods to keep away from tariffs by growing purchases of US items corresponding to liquefied pure fuel (LNG) or agricultural merchandise.
“I instructed the European Union that they need to make up their great deficit with the USA by the massive scale buy of our oil and fuel. In any other case, it’s TARIFFS all the way in which!!!” Trump wrote on his Reality Social platform on Friday.
Trump’s menace follows overtures already made by Brussels suggesting member states might purchase extra US LNG, which has been a lifeline for the bloc after Russia squeezed provides of fossil fuels following its full-scale invasion of Ukraine.
EU officers have additionally begun work on potential commerce reprisals ought to Trump transfer to impose tariffs, however capitals are eager to keep away from a spiralling financial battle with the White Home given different areas of reliance on the US, corresponding to defence.
European Fee president Ursula von der Leyen mentioned in November that the EU would contemplate shopping for extra fuel from the US.
“We nonetheless get lots of LNG from Russia and why not change it by American LNG, which is cheaper for us and brings down our vitality costs,” she instructed reporters.
One EU official noticed: “It appears odd as a ‘menace’ on condition that von der Leyen alluded to the potential for doing exactly this.”
The US is already the most important provider of LNG and oil to the EU. Within the first half of 2024, the US supplied round 48 per cent of the bloc’s LNG imports, in contrast with 16 per cent from Russia.
America provided 15 per cent of the EU’s oil imports within the third quarter, based on Eurostat, the EU’s statistical company.
Trump has threatened a blanket tariff of as much as 20 per cent on all non-Chinese language US imports. Final month, European Central Financial institution president Christine Lagarde urged Europe’s political leaders to co-operate with him over tariffs and purchase extra merchandise made within the US.
Power analysts mentioned the US would wish to increase LNG manufacturing to provide extra to the EU.
“The important thing downside is that the US has no spare LNG capability to ship to Europe in the intervening time,” mentioned Florence Schmit, vitality strategist at Rabobank, including that European international locations must outbid Asian patrons.
Throughout Trump’s first presidency, then-European Fee president Jean-Claude Juncker supplied to purchase extra US fuel to stem the threats of a commerce battle.
Analysts on the Brussels-based think-tank Bruegel mentioned the EU ought to again up any provides to purchase extra American “with a reputable menace of retaliation that might be carried out if the US decides to impose tariffs on EU exports”.
Costs for worldwide oil benchmark Brent crude have been down 0.4 per cent at $72.61 a barrel on Friday. West Texas Intermediate futures have been down 0.4 per cent at $69.14 a barrel.
Trump’s warning comes amid a high-stakes scramble in Washington to safe continued funding for the US authorities. A potential shutdown loomed on Friday after a Trump-supported plan that might have suspended the debt ceiling was voted down within the Home of Representatives.
