BUDAPEST — European Commission President Ursula von der Leyen is suggesting that one way to deter U.S. President-elect Donald Trump from imposing new tariffs is for Europe to buy more liquefied natural gas (LNG) from America.
During his election campaign, the real estate mogul vowed to bring back jobs to the United States and impose across-the-board duties of up to 20 percent on American imports. Brussels has been revving up to strike back fast and hard against any Trump tariffs to bring the Republican back to the negotiating table and hammer out a deal.
With the opening shot in the trade war yet to be fired, the EU’s first response is to appeal for a détente, von der Leyen said after an informal meeting of the bloc’s leaders in Budapest.
“First of all: engage,” von der Leyen said, when asked about how to avoid Trump’s tariffs, referring to her phone call with the president-elect. “Secondly, discuss common interests […] and then go into negotiations.”
Stressing that the EU still buys significant amounts of energy from Russia, von der Leyen asked: “Why not replace it by American LNG, which is cheaper for us and brings down our energy prices? It’s something where we can get into a discussion, also [where] our trade deficit is concerned.”
It is likely that von der Leyen is taking her inspiration for a potential deal from her predecessor Jean-Claude Juncker, who engineered a highly cosmetic truce with Trump in 2018.
During the first Trump term, Juncker avoided more tariffs by assuring the U.S. president that Europe would facilitate more imports of liquefied natural gas (and more American soybeans.) In fact, the European Commission has no real power in determining European companies’ purchases of LNG and soybeans, but Trump was happy to accept the political theater of parading data that European purchases were going up.
In the first half of this year, the U.S. already provided around 48 percent of the EU’s LNG imports, compared to Russia’s 16 percent.
Laurent Ruseckas, executive director for gas markets at commodities giant S&P Global, said any such deal on fossil fuels was likely to be more about politics than energy.
“The EU doesn’t buy LNG — there’s a global LNG market and LNG buyers have their own contracts,” he said. “It’s certainly possible to do a memorandum of understanding to talk about increasing purchases but ultimately in the past that’s been a way to put a political wrapper around something that was delivered by the market. And the EU is buying as much LNG currently as the market needs.”
According to the EU’s own energy watchdog, ACER, the bloc’s demand for LNG is “likely to reach its peak in 2024” as use of carbon-heavy energy declines and green alternatives become available.
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