United States president-elect Donald Trump has warned the European Union to buy American oil and gasoline or face major tariffs, as his initial tax plans already begin to impact commodities markets.
Trump has said he will impose a blanket 10% tariff on all imported goods, as well as 25% tariffs on Mexican and Canadian imports and up to 60% tariffs on Chinese goods.
“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 posted on his social media platform Truth Social.
The U.S. has become the largest supplier of oil and liquefied natural gas to the E.U. in recent years, as Russia’s gas exports to the E.U. ceased following its invasion of Ukraine.
Increasing American gas exports to regions like the E.U. could lead to price increases of up to 30% in the United States, a U.S. Department of Energy study found last week.
Trump’s choice for Treasury Secretary, Scott Bessent, has said that a 60% tariff on China would be a “maximalist negotiating position”, although he levied significant tariffs on Chinese goods like aluminium and steel during his first term.
Both the Canadian and Mexican governments have said they would consider retaliatory tariffs if the U.S. imposes high tariffs on their imported goods.
American manufacturing is heavily reliant on Canadian aluminium, with the U.S. International Trade Commission reporting 74.25% of U.S. aluminium was imported from Canada in 2023.
“Open, tariff-free aluminium trade with Canada has underpinned much of the more than $10 billion in domestic investment the industry has made over the past decade,” said Aluminum Association president Charles Johnson last month. “We will continue to work with the administration to tailor trade interventions to help our industry, and US manufacturing in general, succeed.”