Trump to EU: Buy more oil and gas or face tariffs

President-elect Donald Trump says the European Union must buy more oil and gas from the U.S. or face sweeping tariffs on products they send to the states.

Mr. Trump said he wanted to fix a trade imbalance between the U.S. and Europe.

“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,” Mr. Trump wrote Friday on social media. “Otherwise, it is TARIFFS all the way!!!”

The threat is Mr. Trump’s latest use of tariffs to get policy outcomes or rebalance trade.

Mr. Trump has threatened a tariff of at least 10% on all goods imported into the U.S. He’s also floated levies of up to 60% on Chinese goods and a 25% tariff on goods from Canada and Mexico if they do not tackle illegal immigration and drug trafficking.

The U.S. is the world’s largest oil producer. The E.U. recently increased its American purchases as part of a shift away from Russia and its energy supplies.

In November, European Commission Ursula von der Leyen said the E.U. should consider increasing its purchases of liquefied natural gas from the U.S. to maintain a healthy trade relationship.

Ms. von der Leyen also implicitly warned about trade wars in a statement congratulating Mr. Trump on his election victory.

“Let us work together on a transatlantic partnership that continues to deliver for our citizens,” she said. “Millions of jobs and billions in trade and investment on each side of the Atlantic depend on the dynamism and stability of our economic relationship.”

Tariffs are a form of tax or duty paid on imports. Mr. Trump says tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.

While tariffs hurt foreign countries by making their products more expensive and harder to sell in the U.S., foreign countries don’t pay the tariffs directly to the U.S. Treasury. Companies pay the levies and can pass at least some of the cost to consumers through higher prices.

The Congressional Budget Office recently estimated that a blanket 10% tariff on all imported goods plus an additional 50% tariff on Chinese goods would decrease deficits by $2.7 trillion over the 10-year budget window.

However, they would make “consumer goods and capital goods more expensive, thereby reducing the purchasing power of U.S. consumers and businesses,” the economic scorekeepers said.