United States President-elect, Donald Trump, has issued a warning to European Union (EU) nations, threatening increased tariffs unless they significantly boost their purchases of American oil and gas to reduce the trade imbalance with the United States.
“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 announced on Truth Social, the platform owned by his media company.
The declaration underscored Trump’s ongoing use of tariff threats as a bargaining tool to address what he perceived as unfair trade practices. Last month, Trump vowed to impose a 25% tariff on all imports from Canada and Mexico unless those countries took stricter measures on drug trafficking and border control.
The renewed tariff rhetoric was causing unease among business leaders both in the United States and abroad. Experts warned that even the suggestion of tariffs could discourage investment, lead to job losses, and destabilise global markets. European stocks fell sharply on Friday following Trump’s remarks, while U.S. stocks dipped slightly in premarket trading.
Economists have raised concerns that new tariffs could exacerbate inflation, reigniting a global crisis just as markets are struggling to stabilize.
Despite Trump’s push for increased fossil fuel exports, the United States was already Europe’s largest supplier of liquefied natural gas (LNG). According to the U.S. Energy Information Administration, Europe turned to American energy to offset its reliance on Russian gas, especially in the wake of the war in Ukraine.
However, Trump has consistently criticised trade gaps as evidence of inequitable trade practices. While Europe exported more goods to the U.S. than it imported, the trade deficit was less significant compared to America’s deficits with other countries like China, Canada, and Mexico.
On the campaign trail, Trump pledged to ramp up American fossil fuel production by relaxing regulations on drilling and fracking. His latest remarks aligned with this agenda, pressuring Europe to purchase more U.S. energy as part of his broader strategy to close trade gaps.
The threat of a trade war has introduced fresh uncertainty into the global economy. Business leaders and policymakers now face mounting questions about the potential impact of Trump’s tariff threats on international trade and market stability.