President-elect Donald Trump doubled down on his tariff threats Thursday night, pledging to raise tariffs on European Union nations unless they increase their purchases of American oil and gas to narrow the trade gap 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 posted on Truth Social, which is owned by his media company.
Trump has continued to use the threat of tariffs as a negotiating tactic with countries he believes are treating the United States unfairly. In November, Trump threatened a massive 25% across-the-board tariff on all imported goods from Canada and Mexico unless those countries tighten up what he viewed as lax drug and border enforcement.
The specter of higher tariffs, or even a trade war, also adds to the confusion and uncertainty facing business leaders in the United States and overseas. Some experts have warned that even the threat of tariffs can cost business investment and jobs, not to mention hit share prices.
On the campaign trail, Trump routinely said he would work to ramp up America’s fossil fuel production even though the United States produces more oil than any nation in history. He has promised to loosen regulations on new drilling and fracking, and his message that Europe must buy more energy from America is consistent with his pledges.
But the United States is already the largest supplier of liquefied natural gas to Europe, according to the US Energy Information Administration. Europe has largely weaned itself off Russian natural gas during the ongoing war with Ukraine, making large-scale purchases of gas from America to make up for some of the difference.
Still, Europe exports far more goods to the United States than it imports from America. Although trade gaps are common Americans don’t demand as many European goods as they do goods from China, Canada and Mexico Trump has consistently lashed out against trade gaps as evidence of unfair trade practices.
European stocks fell sharply Friday, and US stocks were slightly lower in premarket trading. Trump’s tariff threat adds more uncertainty into a market that is already weary of stalled-out progress on inflation. Higher tariffs could reignite a global inflation crisis, economists have predicted.
