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More natural gas, fewer tariffs. It’s a simple bargaining card Europe hopes could avoid a messy trade war with the United States. 

The day he assumed office, U.S. President Donald Trump reupped the threat to slap blanket tariffs on European Union goods unless the bloc agreed to buy more oil and gas from America. European Commission president Ursula von der Leyen had already signaled after Trump’s win in November that Europe could indeed buy more American liquefied natural gas (LNG). 

Tariffs would be deeply disruptive for the Continent, which is already facing deindustrialization and a growing competitive disadvantage vis-à-vis the U.S. and China. 

This new dynamic with Europe highlights two seismic shifts: the global geopolitical realignment under Trump’s second term and the soft power the U.S. can wield as the world’s leading producer of oil and natural gas. 

“Trump could act as the LNG marketer-in-chief,” Anne-Sophie Corbeau, global research scholar at Columbia University’s Center on Global Energy Policy, said in a recent webinar. But how successful he will be at selling more LNG to Europe depends on several factors, she added. 

We break down the market realities behind the political posturing to understand what’s feasible and the potential consequences. 

Where does Europe get its gas?

Since Russia’s invasion of Ukraine in 2022, Europe has had to rely significantly more on imported LNG and less on gas delivered via pipelines from Russia to meet its needs. The U.S. has been the main beneficiary of this shift. 

Over the last several years, the U.S. has become the EU’s biggest LNG supplier, providing 45% of the bloc’s LNG needs last year, according to ICIS, a commodity intelligence service. That’s three times more than in 2021. Germany takes nearly all of its LNG from America.  

Thus far in 2025, the trend seems to be continuing, as European demand for LNG is expected to rise this year.

Should Europe buy more U.S. LNG?

Depends on who you ask. 

Michael Lewis, CEO of the German utility Uniper, said last week that U.S. LNG exports to Europe would be good news.

“We are ready to buy more natural gas,” he said at an energy conference in Berlin. 

But speaking at the same event, the German economy minister Robert Habeck warned Europe should limit reliance on American gas. Europe should “meet the Trump administration with an outstretched hand, but not have our hand cut off,” he said. 

Global LNG prices fluctuate based on supply and demand dynamics. Forcefully mandating firms to buy LNG from the U.S., rather than wherever it is cheapest, is “the opposite of a market economy,” the minister warned.

Indeed, “let’s not forget that neither the Trump Administration nor the European Commission can actually dictate where the energy goes,” Corbeau said. “This is in the hands of commercial companies and commercial companies are only interested in one thing: making money.” 

Nonetheless at the political level, European Commission spokeswoman Anna-Kaisa Itkonen said last week the EU executive is “ready to negotiate” with the new Trump administration, looking to set up talks with the new officials. 

How does Russia fit into this new dynamic?

While supplies of Russian piped gas have dwindled in recent years following the country’s 2022 invasion of Ukraine, cargo shipments of Russian LNG to the bloc actually reached record levels in 2024 — and the EU has been buying it at an unprecedented rate this year already.  

The EU has imposed several sanctions on Russian energy products since the war started, but not on natural gas delivered for direct use by member states (neither piped nor LNG), since this is a particularly sensitive topic for some EU governments still highly dependent on Russian gas.

Sanctions on Russian LNG could direct the European market to seek even more U.S. LNG as a substitute, said Laurent Ruseckas, executive director for global gas commodities at S&P global.

The EU is unlikely to propose such a ban in its next round of sanctions expected this week, Bloomberg reported. EU member states would have to agree unanimously on sanctions. Instead, the Commission is expected to release a roadmap next month suggesting ways to reduce Russian gas imports.

Can the U.S. provide more LNG?

Yes, but not overnight. 

The U.S. is already the world’s largest producer of oil and natural gas, and increasing capacity further would require significant investment, especially for LNG export terminals. 

Trump has pledged to further grow the country’s oil and gas production and reverse Biden’s decision to pause the permitting of new LNG terminals. 

If these plans materialize, U.S. LNG export capacity could nearly double by 2030, according to Rystad Energy. 

Would European energy prices come down?

It depends. When von der Leyen pitched the extra LNG purchases, she described American gas as “cheaper for us and brings down our energy price.” 

A boost in U.S. LNG exports could see European gas prices drop by 9% by the end of the decade, according to a recent analysis by Aurora Energy Research, an analytics provider.  

Europe has been battling high energy prices since 2022. Efforts to diversify away from Russian gas resulted in pricier bills for energy imports, since LNG is more expensive than piped gas and Europe was competing with Asia for cargoes. 

Even if U.S. LNG ends up being more expensive than expected, “that’s nothing compared to the disruptions that would come” if Trump hit Europe with tariffs, said Ruseckas. 

What other risks are there?

Buying more U.S. LNG would increase the EU’s reliance on one major supplier. 

“Do we really want to be Donald Trump’s main client where he has leverage over Europe with gas?” asked Raphael Hanoteaux, senior policy advisor on gas politics at environmental think tank E3G. “We’ve seen Russia using gas as a political weapon and it seems Trump is doing the same,” said Hanoteaux. 

But Ruseckas at S&P Global said it’s “not analytically correct” to compare dependency on Russian piped natural gas with U.S. LNG because the markets are different.  

And while Russian President Vladmir Putin controls Russian companies, the U.S. president does not control American LNG companies.  

Will it work, trading American gas for avoided tariffs?

That’s the tricky question.  

Ruseckas described Europe’s LNG proposal as an “offer made in good faith” to kick off wider trade discussions.  

It’s a clever negotiating move but cannot guarantee the bloc won’t face new tariffs, said Hanoteaux. In the long term, Europe’s gas demand is projected to decrease, he said. 

Meanwhile, Linda Kalcher, executive director of consultancy Strategic Perspectives, said she’s worried Europeans will be perceived as weak in the negotiations because “they are doing everything to keep Trump calm.” 

“The only certainty is the uncertainty: It’s not predictable what Trump does,” she said, “which puts the dealmaking on very fragile ground.”