"Trade energy purchases for tariff exemptions? Trump plays the "America First" card again"

Amid rising tensions in global trade, US President Trump has sent a signal that countries wishing to avoid higher tariffs imposed by the US should "buy more American energy." On Wednesday, Trump announced a suspension of the "equal" tariff policy for countries other than China, in an attempt to prevent a full-blown global trade war. Most countries currently face a 10% basic tariff and have a three-month window to reach bilateral trade agreements with the US to avoid higher tariffs on goods. The core purpose of Trump's move is to reduce the US trade deficit and achieve his so-called "energy dominance" strategy. He explicitly stated on Monday that he hopes the EU will buy up to $350 billion of US energy to offset their trade surplus with the US. According to data from the US Trade Representative's Office, the US-EU trade deficit is projected to be $235.6 billion by 2024. "They have to buy our energy," Trump told reporters at the White House, "because they need it. We can solve a $350 billion problem in a week." He also warned that if the EU does not reach an agreement with the US, they could face punitive tariffs as high as 20%. As the world's largest oil and gas producer, the US has become the third-largest oil exporter and the largest liquefied natural gas (LNG) exporter by 2024. According to a report by Barclays Bank, energy products make up about 15% of the US export total by 2024. Analyst Betty Jiang from Barclays pointed out in a research report on Tuesday that liquefied natural gas is the "most potentially increasing commodity for US export share," and countries can meet US trade requirements by expanding LNG imports from the US. Alaska LNG Project as a breakthrough? US Treasury Secretary Beznat revealed in an interview on Tuesday that Japan, South Korea, and Taiwan may invest in the flagship Alaska LNG project, which could provide leverage in their trade negotiations with the US. Beznat said that these countries would not only provide funding support for the project but also purchase a large amount of liquefied natural gas from it. "This will not only create a significant number of jobs in the US but also help reduce the US trade deficit," he said. If they fail to reach an agreement with the US, Japan would face a 24% tariff and South Korea 25%. Since taking office, Trump has been pushing for US liquefied natural gas exports, particularly focusing on developing Alaska's energy resources. He signed an executive order on his first day in office prioritizing the development of Alaska LNG and specifically mentioned the project in his speech to Congress in March. According to estimates from the Alaska Gasline Development Corporation in 2018, the project is expected to cost over $40 billion. Natural gas will be transported from the North Slope of Alaska through an 807-mile pipeline to a liquefaction plant in Nikiski, Cook Inlet, and then exported to Asia. US Interior Secretary Doug Burgum said at a conference in Houston last month that the Trump administration believes the project is critically important for US energy security and independence. Allies are already major buyers, but far from meeting US appetite In fact, the EU, Japan, and South Korea have long been major buyers of US LNG. Barclays data shows that by 2024, the EU purchased 39% of US liquefied natural gas exports, Japan 7%, South Korea 6%, and India 5%. However, the Trump administration clearly hopes that these allies will increase their purchases to gain "exemptions" in trade. As the negotiation deadline approaches, the pressure on countries continues to increase.