Trump's $350 billion European oil and gas idea is a heavy lift
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There's probably room for the EU to buy even more U.S. oil and gas, but the $350 billion target President Trump floated to bargain down new tariffs would be a heavy lift.
Why it matters: Trump sees U.S. fossil fuels as a negotiating point with countries in Europe and Asia — a merger of his trade and "energy dominance" agendas.
Catch up quick: Trump last week focused on more energy exports to end the trade deficit with the EU.
- "They're going to have to buy our energy from us, because they need it," he said in the Oval Office. "They can buy it, we can knock off $350 billion in one week."
Yes, but: EU purchases of U.S. energy are already a really big share of U.S, exports (see above), and several analyses highlight challenges to hitting Trump's $350 billion target.
- Wood Mackenzie's Ed Crooks explores various reasons why even more oil and gas exports can't alone transform bilateral trade balances.
- "[T]he mechanics are challenging," the firm's vice chair for the Americas writes.
- "Countries will need to make commitments to buy more US oil and gas to show that they are not just offering empty promises. In the oil market, refiners and fuel suppliers will generally not want to make those long-term commitments," he writes.
The intrigue: When it comes to LNG, long-term contracts are common, but other challenges remain.
- A smart WSJ piece unpacks why there's "little appetite" to buy more U.S. energy beyond the recent expansions.
- "To reach Trump's $350 billion target means the U.S. would replace most of the EU's other suppliers in Norway, North Africa and the Middle East," Matthew Dalton and Georgi Kantchev report.
Threat level: The WSJ writers and other analysts note that EU officials are wary of again hitching their wagon to a single supplier after breaking up with once-dominant Kremlin-controlled supplies.
What we're watching: The role of energy in U.S.-EU talks now that Trump has paused 20% tariffs (though the 10% levy remains).
