“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!!!” President-elect Donald Trump warned early Friday morning on Truth Social.
According to the Office of the US Trade Representative, the US trade deficit in goods and services with the EU totaled $131.3 billion in 2022. Following Trump’s presidential victory last month, the EU has been gearing up for a potential trade war with Trump.
The good news is that the US has become the world’s largest crude oil producer and the top LNG exporter. As Brussels and Washington work aggressively to curtail Russia’s energy flows into Europe—whether crude oil, refined products, or NatGas—the US is well-positioned to fill the gap.
Bloomberg noted that the euro traded slightly higher, up about .3% to $1.0398, amid signs that EU officials may increase energy imports from the US in 2025 to avoid a full-blown trade war and remain in Trump’s good graces.
In late November, German Foreign Minister Annalena Baerbock told the Group of Seven conference in Italy that the EU is “well-prepared for the possibility that things will become different with a new US administration,” adding, “If the new US administration pursues an ‘America first’ policy in the sectors of climate or trade, then our response will be ‘Europe united.'”
The EU Commission president, Ursula von der Leyen, said last month that US LNG has the potential to replace the bloc’s remaining imports of Russian LNG.
“We still get a whole lot of LNG via Russia, from Russia,” von der Leyen said, adding, “And why not replace it with American LNG, which is cheaper, and brings down our energy prices.”
NEW: President of the European Union commission says they want to start buying oil from the United States and not Russia.
Trump wins the election and the world falls in line. Remarkable.
“We still get a lot of [liquified natural gas] from Russia, and why not replace it by… pic.twitter.com/E6OwSN6UrR
— Collin Rugg (@CollinRugg) November 8, 2024
The US is already Europe’s largest provider of LNG, but imports from Russia remain number two. Brussels continues to search for new ways to curb Moscow’s energy flows into the continent, which will only suggest US energy supplies will be the eventual replacement. We commented earlier this week on the latest fiasco with Russian NatGas pumped into Ukraine, then Slovakia, which is set to be halted at the first of the year.
Final Countdown: Slovakia Warns Of “Economic Damage” As Ukraine NatGas Transit Nears End https://t.co/YIMOHCx7uZ
— zerohedge (@zerohedge) December 18, 2024
However, Bloomberg pointed out, “The US doesn’t have much more capacity to increase shipments. And since LNG is sold through long-term contracts, adding shipments to Europe would require original buyers of the gas to agree to divert its shipments to Europe — but that wouldn’t boost the amount being exported by the US,” adding, “Over the longer term, more capacity will come on line with dozens of projects in the US currently in the works.”
Tyler Durden
Fri, 12/20/2024 – 10:40
