Trump said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
US President-elect Donald Trump said on Friday (20 December) that the European Union may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world’s largest economy.
“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,” Trump said in a post on Truth Social.
“Otherwise, it is TARIFFS all the way!!!,” he added.
Trump has promised to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
Trump, who takes office on 20 January, has already pledged hefty tariffs on three of the United States’ largest trading partners – Canada, Mexico and China.
The European refining industry belongs to oil majors and trading houses and the governments have no say on where the purchases are coming from. The owners usually buy their resources based on price and efficiencies.
US oil and natural gas exports already flow to Europe when market conditions make those purchases more attractive versus rival producers.
US crude oil exports to northwest Europe are likely to slip early next year after hitting a record high in November, as the arbitrage for transatlantic shipments has slammed shut and freight rates have climbed, analysts said this week.
European stocks tumble
European shares were on course to post their worst week in three months on Friday after Trump’s comments about potential tariffs on the EU, which further spooked investors already worried about the rate outlook.
The pan-European STOXX 600 index fell 0.8% by 0812 GMT, trading at its lowest in nearly a month and on course for its biggest weekly decline since early September.
All the major European subsectors were in the red, with banks and miners leading losses.
The German DAX and France’s CAC 40 fell about 1% each.
Britain’s FTSE 100 posted a smaller decline compared with its European peers, down 0.3%. Data showed British retail sales rose by a weaker-than-expected 0.2% in November, adding to signs of slow momentum in the economy.
Investors are awaiting US inflation data later in the day for hints on the pace of rate cuts next year.
European stocks had tumbled on Thursday after the Federal Reserve projected fewer rate cuts next year and higher inflation.
Idorsia tumbled about 41% after the Swiss pharma company announced delays to a rights deal related to its hypertension drug Tryvio, raising funding concerns.
