European Commission President Ursula von der Leyen recently suggested that the European Union (EU) could increase its imports of U.S. liquefied natural gas (LNG) to reduce reliance on Russian energy, following a conversation with U.S. President-elect Donald Trump. The potential shift, aimed at addressing energy security concerns and economic factors, may also serve as a strategy to avoid new tariffs threatened by Trump during his campaign.

Von der Leyen indicated that EU leaders are exploring ways to pivot from Russian-supplied LNG to U.S. sources, which could lower energy costs for the EU. “We still get a whole lot of LNG from Russia. Why not replace it with American LNG, which is cheaper, and brings down our energy prices?” she remarked on Friday, according to Bloomberg. Currently, the United States is Europe’s largest supplier of LNG, but Russian imports still represent about 16% of the EU’s total LNG intake, with shipments primarily reaching France, Spain, and Belgium.

In her comments, von der Leyen emphasized that increasing U.S. LNG imports could help mitigate the EU’s trade deficit with the United States while addressing energy concerns. Her approach mirrors the efforts of her predecessor, Jean-Claude Juncker, who reached a temporary truce with Trump in 2018 by committing to higher European imports of U.S. LNG and soybeans. While such an agreement may not fundamentally alter market dynamics, it offers a political gesture that could ease tensions.

The EU’s focus on U.S. LNG imports follows concerns that Trump’s upcoming administration might impose tariffs on European goods as part of his broader trade agenda, which includes bringing manufacturing jobs back to the U.S. In response, EU leaders met in Budapest to strategize on avoiding a potential trade conflict, with von der Leyen stating that the primary approach would be to “engage” and discuss mutual interests before entering negotiations. By proposing increased American LNG purchases, the EU hopes to create goodwill that could prevent further tariffs.

While the European Commission lacks the direct authority to dictate LNG purchases by private companies within the EU, analysts suggest that political signals from the Commission can influence purchasing trends. Laurent Ruseckas, executive director for gas markets at S&P Global, noted that the initiative appears more symbolic than operational. “The EU doesn't buy LNG—there's a global LNG market and LNG buyers have their own contracts,” he told Politico. “It's certainly possible to do a memorandum of understanding to talk about increasing purchases, but ultimately, that’s been a way to put a political wrapper around something driven by the market.”

The EU’s demand for LNG is projected to peak in 2024, according to the EU energy regulator ACER, as green energy initiatives increasingly displace fossil fuels. Nonetheless, the prospect of increasing U.S. LNG imports highlights the EU’s intent to reduce dependency on Russian energy amid the ongoing Ukraine conflict, even as Russian pipeline gas and LNG remain largely exempt from sanctions.

Bloomberg Article