Trump demand for the EU to buy $350bn in U.S. energy unrealistic
Trump said the EU could avoid higher tariffs if it buys high amounts of oil and gas — but the numbers show this is unrealistic. The EU is negotiating, but is speeding up the deployment of renewables and readying trade retaliation.
The European Union is using LNG as a bargaining chip to tamp down President Trump’s ire after he launched an unprovoked trade war, but there is a chasm between what the EU can realistically do and what Trump is demanding.
Trump imposed a ten percent tariff on the EU, issuing a 90-day pause on the higher tariff rate of 20 percent. In the meantime, trade talks will begin between the two sides.
The EU suggested zeroing out tariffs on both sides for industrial goods, but Trump said that was not sufficient. Instead, Trump has said he wants the EU to buy $350 billion worth of energy from the United States in order to avoid getting hit with tariffs.
“We have a deficit with the European Union of $350 billion and it’s gonna disappear fast,” Trump said. “One of the ways that that can disappear easily and quickly is they’re gonna have to buy our energy from us … they can buy it, we can knock off $350 billion in one week. They have to buy and commit to buy a like amount of energy.”
But the $350 billion figure is comically impractical. According to Energy Flux, the entire value of imports into the EU of American oil, gas, and coal only reached €65 billion in 2024, which was down from €79.1 billion in 2023. The FT pegged the U.S.-EU LNG trade at just $13 billion.
The U.S. cannot produce enough gas to supply a tripling of LNG exports to Europe, and Europe has no need for such a level of imported gas. In fact, European gas consumption is in structural decline, even though it is looking for alternatives to Russian pipeline gas in the short run.
Moreover, the mechanism to increase the LNG trade is a bit unclear. European companies, not governments, would need to sign on to long-term contracts to underpin new LNG construction in the U.S.
Even before the trade war, contracting activity has come to a halt in recent months. There hasn’t been a single end-user to sign a contract with a U.S. LNG project since November 2023, according to a BCG analyst.
If Trump’s goal is to increase energy exports, his trade war is pushing that objective further out of reach. On the one hand, Trump’s aggressive deregulation and forceful calls for more drilling and more LNG exports is a boost to the oil and gas industry. But imposing tariffs on the entire world is doing far more damage, crashing oil prices and likely bringing drilling to a halt, while complicating the ability of LNG developers to find overseas customers.
Trump’s trade war has significantly tarnished the image of both the U.S., and the reliability of American gas. Long-term contracts, which typically last 20 years, require trust between buyers and sellers, and Trump has gone to great lengths to destroy U.S. credibility. He is also risking a global economic recession, which would cut into demand.
Meanwhile, even as the EU will pitch the idea of buying more LNG as a way of defusing trade tensions, Europe is also moving to accelerate the buildout of renewable energy. The EU expects to install 89 gigawatts of renewables this year, a record high.
“There is potential for us to buy more LNG from the US but of course it needs to be on conditions that are also in line with our [green] transition,” the EU’s energy commissioner Dan Jørgensen said, according to the FT. He added that renewables are “essential” to bring down high energy prices, and vowed to streamline permitting for new solar and wind.
It’s not clear that modest increases of LNG purchases will be enough to convince Trump to call off the trade war, especially since the two sides are so far apart. In the meantime, the European Union is readying retaliation, suggesting that it could impose tariffs on U.S. digital companies if trade talks fail, which would hit the U.S. tech industry hard.
(Reporting by Nick Cunningham; editing by Sophie Davies)