Trump threatened the European Union with tariffs

According to RCO News Agency, in a message on his page on the social network Truth, the President-elect of the United States, “Donald Trump”, threatened the European Union if it does not compensate the “very large” trade deficit of the United States by buying its oil and gas, subject to Washington’s customs tariffs. will be

Trump wrote in Truth: “I have told the European Union that they must compensate America’s very large trade deficit by buying our oil and gas on a large scale. Otherwise, we will apply tariffs where possible.

Donald Trump’s victory in the US presidential election has raised concerns about the impact of his tariff policies on liquefied gas exports to Europe.

When Trump threatened European exporters with tariffs on all goods exported from the region before the election, many in Europe probably hoped he would never return to the White House. Now that this is a reality, tariffs are subject to negotiations, and those negotiations may include buying more liquefied natural gas (LNG) from the US.

According to a Reuters report, the US is currently facing a trade deficit of 240 billion dollars with Europe. According to Eurostat, Germany, Italy, Ireland and Sweden are the largest European exporters to the US and account for a large part of this trade deficit. America is the biggest trading partner of European Union and oil and natural gas are one of the most important imports of America to Europe.

Donald Trump has repeatedly stated that he is against this trade situation and that the Europeans will pay a “heavy price” for it; Unless they start importing more American goods. Reuters author Gwyn Maguire said: Europe may retaliate by reducing US LNG consumption and disrupt Trump’s plans for higher oil and gas production.

If Europe was not dependent on imported energy and the US, the largest supplier of LNG to the region, this move could be a potential move for Europe. The U.S. Energy Information Administration reported in February this year that in 2023, the U.S. would be the source of nearly half of all LNG imports into Europe.

The figure of 48% shows an increase compared to 44% in 2022 and 27% in 2021. The war in Ukraine boosted US LNG exports to Europe and US capacity expansion projects. However, this year, export growth was weak, and a report by the US Energy Information Administration showed that natural gas exports from the country were flat in the first half of the year.

This lack of growth was the result of several factors. First, Europe had another relatively mild winter and gas remained in the reservoirs of this region. Second, Germany, the largest gas consumer in Europe, continued to deindustrialize as economic contraction affected demand for energy in general and demand for gas in particular. Third, summer is the gas demand season in Europe. On the other hand, the situation is very different in winter, when Europe consumes the most gas and coal.

Trump has indicated that he wants America to produce more natural gas and also wants to export more goods to Europe in general. Europe has also announced through its senior executive that it will be happy to receive more gas from America; Of course, he does not have much choice. If Europe considers the price of American LNG expensive, it will certainly not be easy for American gas producers to change the flow of LNG exports from Europe to Asia.

However, it will be much more difficult, indeed, impossible, for Europe to find another gas supplier that is comparable to the US in terms of production size and that is not Russia.

According to the Oil Price website, in fact, American LNG producers and European gas importers need each other. This relationship is not an equal relationship, but it has two-way benefits, and therefore, both parties want to maintain it. Tariffs won’t make Europeans like Trump more, but it will probably make them buy more LNG from the US.

The “debt ceiling” mechanism of the US Congress

In another message on the Truth social network, Trump wrote about the government’s “debt ceiling” law: Congress should either abandon the ridiculous debt ceiling law or extend its market until 2029. We should not do anything without this agreement. Let’s remember that the pressure is on whoever is the president.

For decades, the United States has been spending more than it takes in from taxes and is effectively using its credit budget to buy capital and pay its bills.

As defined by the U.S. Treasury Department, “the debt ceiling is the amount of money the U.S. government is authorized to borrow to meet its current legal obligations, including Social Security and Medicare, military pay, and other payments.”

The amount of US government debt has reached 31.46 trillion dollars.

In other words, the amount of government debt can only be a certain amount set by Congress, and only Congress can raise this ceiling.

Congressional Republicans have so far resisted, insisting that if the administration seeks their approval to raise the debt ceiling, then Democrats must also commit to reducing government spending in the future.

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