By Philip Blenkinsop
BRUSSELS (REUTERS) – The US President Donald Trump has promised to tackle a long -standing trade deficit with the European Union, by saying that he will reverse it by imposing rates or having the EU buy more American oil and gas.
In an ‘America First Trade Policy’ memo issued in the White House on his first day, Trump ordered the Ministries of Trade and Finance and the American trade representative to investigate the trade deficit in goods and to take appropriate measures by April orders.
Chairman of the European Commission, Ursula von der Leyen, said on Tuesday that the EU wants to negotiate and negotiate with the United States, and warned of the risk of a “worldwide race to the soil” with the help of instruments such as trading rates.
Below are some important facts about the trade relationship between the EU and the US and how the two parties can treat each other in the coming weeks and months.
Goods trade shortage
Trump tends to only concentrate on the goods trade and has often complained about the car export from the block to the US, while few vehicles are shipped to the east over the Atlantic Ocean.
The EU has consistently exported more goods to the United States than it has imported and according to data from Eurostat, the trade deficit of the US in 2023 was 155.8 billion euros ($ 161.6 billion).
In the field of the service sector, however, according to Eurostat in 2023, the US with the European Union has an export surplus compared to the import of 104 billion euros.
The United States is the largest trade and investment partner of the EU and both are each other’s largest source of direct foreign investments.
Germany dominates EU exports
Germany is by far the largest exporter of goods, including cars and machines, to the United States, with more than 30% of the total transatlantic goods export of the block in 2023. Italy, in second place, had a 13% share.
Many EU policy makers have called for unity in the EU in the light of the tariff threat. This turned out to be a successful strategy in the Brexit negotiations with the smaller Great Britain.
However, unity in the EU in this area is not guaranteed, given the rise of more nationalist, populist politicians in various countries in recent years.
Officials in Brussels hope that right -wing Italian Prime Minister Georgia Meloni can offer a route to Trump’s presidency. Hungarian Prime Minister Viktor Orban, who has a reputation as Veto about EU policy, in particular Ukraine, has said that Trump’s presidency could cause a right-wing wave in Europe and even more disturbance of EU policy. Discussions are underway in Austria to form a coalition government under the leadership of the Eurosceptic Extreme Right Freedom Party, after this had won the elections last September.
Oil and gas
During the three years until 2023, the United States has been the largest supplier of liquid gas (LNG) to the European Union and Great Britain.
According to data from the EU statistics agency Eurostat, the US supplied 46% of EU imports of LNG and 15% of oil imports in the third quarter of 2024.
Trump has said that the block should import more American oil and gas, but it is not clear how this is possible.
The United States currently produces everything they can produce and domestic consumption, which is already high, rises in a number of sectors and as a result of the high energy needs of artificial intelligence. There is no reserve capacity to export.
The ‘Drill, Baby, Drill’ promise of Trump could lead to sources from new projects, but it will take some time before it becomes reality. Perhaps he will demand that Europe signs long -term contracts to buy more LNG.
Yet the EU consumers of American LNG are mainly private companies and not governments, and their purchases are driven more rather than the politics.
The EU still imports part of the LNG from Russia. A decision of the block to end this through sanctions could encourage importers to look over the Atlantic Ocean.
The image is similar to oil.
Military purchases
Another factor in the trade comparison is Defense. Trump insists on his fellow NAVO members to increase their defense expenditure and after the Russian invasion of Ukraine there is indeed a general willingness of the EU to do that.
EU countries are still arguing about the extent to which the money from the taxpayers must be spent on weapons from outside the EU and to what extent the block should stimulate its own defense industry.
The European arms import from the United States has already grown and, according to the Stockholm International Peace Research Institute, reached 55% of all European arms of arms in 2019-2023, compared to 35% in 2014-2018.
($ 1 = 0.9643 euros)
