A new agreement is emerging between the EU and the USA. The President of the European Commission proposes replacing Russian gas with cheaper American LNG. Discover the challenges of this proposal which could redistribute the energy cards in Europe…
A new wind is blowing through trade relations between the European Union and the United States. During a telephone exchange, European Commission President Ursula von der Leyen proposed to US President-elect Donald Trump a bold solution to reduce Europe's energy dependence on Russia: replacing Russian gas by American liquefied natural gas (LNG), at more advantageous prices.
A win-win agreement for the EU and the USA?
This proposal comes as Donald Trump threatens to tax more European products imported into the United States, in order to rebalance the trade balance which he considers unfavorable to his country. According to a source close to the matter, Ursula von der Leyen's offer could constitute common ground, by allowing the Americans to export more LNG to Europe in return for reduced taxes on European products. .
The benefits for Europe
For the EU, the interest is twofold. On the one hand, diversify its sources of natural gas supply by reducing its dependence on Russia, a supplier that is sometimes unpredictable on a geopolitical level. On the other hand, benefit from more competitive prices on American LNG, which would make it possible to lower energy prices for European consumers and businesses.
We still get a lot of LNG from Russia so why not replace it with American LNG which is cheaper for us and lowers our energy prices?
Ursula von der Leyen, President of the European Commission
A logistical and infrastructural challenge
However, to realize this vision, Europe will need to invest massively in its gas infrastructure, in order to be able to receive and distribute larger volumes of LNG within its territory. This involves the construction of new LNG terminals, the strengthening of gas pipeline networks and the development of additional storage capacities.
Towards a rebalancing of commercial relations?
If it comes to fruition, this proposal could mark a turning point in trade relations between the EU and the United States, by promoting enhanced cooperation in the energy field. It remains to be seen whether Donald Trump will be sensitive to this argument, he who constantly denounced European trade surpluses during his campaign.
German Chancellor Olaf Scholz is optimistic and believes that there are solid bases for developing a common trade policy with Washington. According to him, the growth and strength of the American economy also depends on its ability to trade with the rest of the world in both directions.
Next steps
Discussions between the EU and the United States on this issue are expected to continue in the coming weeks. If an agreement is reached, it will mark a new era in transatlantic energy cooperation and will strengthen Europe's security of supply, while offering new outlets for American LNG. A situation that could benefit both partners, provided they find the right balance between their respective interests.
For the EU, the interest is twofold. On the one hand, diversify its sources of natural gas supply by reducing its dependence on Russia, a supplier that is sometimes unpredictable on a geopolitical level. On the other hand, benefit from more competitive prices on American LNG, which would make it possible to lower energy prices for European consumers and businesses.
We still get a lot of LNG from Russia so why not replace it with American LNG which is cheaper for us and lowers our energy prices?
Ursula von der Leyen, President of the European Commission
A logistical and infrastructural challenge
However, to realize this vision, Europe will need to invest massively in its gas infrastructure, in order to be able to receive and distribute larger volumes of LNG within its territory. This involves the construction of new LNG terminals, the strengthening of gas pipeline networks and the development of additional storage capacities.
Towards a rebalancing of commercial relations?
If it comes to fruition, this proposal could mark a turning point in trade relations between the EU and the United States, by promoting enhanced cooperation in the energy field. It remains to be seen whether Donald Trump will be sensitive to this argument, he who constantly denounced European trade surpluses during his campaign.
German Chancellor Olaf Scholz is optimistic and believes that there are solid bases for developing a common trade policy with Washington. According to him, the growth and strength of the American economy also depends on its ability to trade with the rest of the world in both directions.
Next steps
Discussions between the EU and the United States on this issue are expected to continue in the coming weeks. If an agreement is reached, it will mark a new era in transatlantic energy cooperation and will strengthen Europe's security of supply, while offering new outlets for American LNG. A situation that could benefit both partners, provided they find the right balance between their respective interests.
