EU’s
opening bid to avoid Trump’s tariffs: We could buy more American gas
Brussels
hopes to avoid trade war with the Republican president-elect.
November 8,
2024 6:12 pm CET
By Barbara
Moens, Gabriel Gavin and Clea Caulcutt
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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