buy american oil or face heavy tariffs, eu told

Donald Trump has threatened European Union member states with punitive tariffs if they fail to buy more US oil and gas, reviving the prospect of a renewed trans-Atlantic trade war.

On Friday, the president-elect announced on social media: “I told the European Union that they must offset their massive deficit with the United States by purchasing our oil and gas on a large scale. Otherwise it’s definitions all the way!!!

This warning comes as Trump insists that the European Union reduce its trade surplus with the United States, which amounted to $131 billion (£105 billion) last year. He is expected to push for a more balanced trade relationship, threatening to impose tariffs on European exports unless the EU buys more American goods and services.

This position may pose a delicate challenge to Britain, as the new US ambassador, Lord Mandelson, is likely to devote a major diplomatic effort to staving off a full-blown trade conflict while trying to preserve the agreement between the European Union and the United States.

Trump’s tough rhetoric is reminiscent of his previous presidency, when he imposed tariffs on steel and aluminum in the European Union and threatened to impose more tariffs on German car imports. That period sparked a wave of trans-Atlantic tensions, EU countermeasures on products such as Harley-Davidson motorcycles and jeans, and a temporary truce in 2018.

This latest escalation suggests a possible return of mutual tariffs. Having been caught off guard before, EU officials have since improved their trade defense capabilities to respond more quickly to US pressure, should it occur. In November, German Foreign Minister Annalena Baerbock indicated that Europe was “well prepared” for a scenario in which Washington revives “America First” policies, and pledged a unified European response.

The EU has also introduced rules enabling it to exclude foreign companies benefiting from government subsidies from bidding for public contracts or pursuing takeovers within the bloc — an insurance policy against what it sees as unfair competition.

Trump has often criticized European countries for relying on the American security umbrella while spending very little on defending themselves, and accused them of exploiting American economic generosity by achieving large trade surpluses. Brussels, the political heart of the European Union, has been called a “hell hole” by the president-elect, who has threatened to step back and allow Russia to “do whatever the hell it wants” if NATO countries fail to invest adequately in their militaries.

These latest tariff threats are not just targeting the European Union. Trump also targeted China and close allies such as Canada, which he jokingly described as “another American state.” In a move to hedge against these threats, some LNG buyers, including European Union member states and Vietnam, have already discussed increasing their purchases from the United States.

The United States remains the world’s largest producer of crude oil and the largest exporter of liquefied natural gas. More than half of US liquefied natural gas exports went to Europe last year, even though the European Union sought to diversify energy supplies and signed agreements with other producers such as Qatar. The urgent need to find alternatives has increased after the Russian invasion of Ukraine revealed the weakness of the European Union due to its previous dependence on Russian energy.

Given Trump’s well-known enthusiasm for the word “tariffs,” which he has long viewed as a key strategic tool, European governments may now find themselves caught between diplomatic negotiations and the threat of surprise trade sanctions. This climate of uncertainty raises the stakes for EU leaders, who must balance the need to secure stable energy supplies with the need to maintain friendly trade relations with Washington.