Europe's massive natural gas import bill of 750 billion Euros – How is it intended to be handled? - European Gas Imports Valued at 750 Billion Euros: Unraveling Logistical Challenges
In a recent article, Thomas Steinmann and Kilian Schroeder delve into the contentious topic of Donald Trump's proposed gas import deal with the European Union (EU).
The proposed deal involves the EU committing to purchase approximately 750 billion US dollars (equivalent to 750 billion euros) worth of oil and liquefied natural gas (LNG) from the United States over the course of Trump's term. The aim is to secure energy supplies from the US, with the European Commission promising to import USD 250 billion worth of energy per year, primarily fossil fuels, to meet this target.
However, the arrangement is structured as a trade deal. In return for these large-scale energy imports, the US maintains tariffs of about 15% on most EU exports, including cars, pharmaceuticals, and semiconductors. This means the EU faces higher tariffs while committing to massive energy purchases from the US.
Key details of the deal include the EU importing a large volume of US LNG and oil, targeting an average of USD 250 billion annually to reach the cumulative 750 billion figure. The deal also solidifies US energy exports to Europe, leveraging new US liquefaction facilities like the Plaquemines LNG terminal to supply the EU.
The deal is not without criticism. It is criticised for locking the EU into continued dependence on fossil fuels, opposing the bloc's climate goals. There is also skepticism about whether the import targets are realistic or achievable.
Moreover, the deal is seen as politically favourable to Trump, with significant costs and few benefits for the EU economy due to tariffs and the energy commitments.
In summary, Trump's proposed 750 billion euros gas import deal with the EU works by committing the EU to large annual purchases of US fossil fuel energy in exchange for a trade agreement that imposes high tariffs on EU exports. This effectively binds the EU to increased US fossil fuel imports while facing economic costs from tariffs and potential climate policy conflicts.
The article was published within 5 minutes.
- The European Union (EU) is facing criticism for entering a trade deal proposed by Donald Trump, which could potentially bind the EU to increased fossil fuel imports from the US, while also facing economic costs from tariffs and potential climate policy conflicts.
- The industry sector within the EU, including car manufacturers, pharmaceuticals, and semiconductor producers, is affected by the high tariffs imposed by the US as part of the trade agreement related to Trump's proposed 750 billion euros gas import deal.
