The new EU-US trade deal is a pivotal point in transatlantic relations. While the headlines give the Trump administration cause for momentary celebration, its long-term implications for energy security, market credibility, and mutual trust are damning. This non-binding political agreement undermines not only transatlantic energy security but also risks damaging the long-term credibility and resilience of both American and European energy systems. As the world continues to adjust to a turbulent era marked by energy shocks, climate concerns, and shifting alliances, the energy provisions of this deal demand scrutiny.
Undermining American and European Energy Security
The EU-US trade deal is highly asymmetrical, imposing tariffs on European export goods and demanding $600 billion in European investments in the United States and $750 billion in American energy imports during Trump’s term. The European position can mainly be explained by its use of issue linkage to US security provisions through NATO as an appeasement strategy to an unpredictable American president. Speculation around a deliberate attempt by the EU to make a promise that cannot be kept by either side does not do justice to the seriousness of Europe’s security situation.
Since Russia’s large-scale invasion of Ukraine, Europe has become one of the largest buyers of American energy, particularly liquefied natural gas (LNG), accounting for over 40 percent of American exports in 2024. Policymakers and industry welcomed this development, regarding diversified imports from the United States as a cornerstone of their energy security. Buying American offered a way for Europe to break its reliance on Russian fossil fuels. The decision was not just about supply but also about trust.
However, the EU-US trade deal signals a marked turn. Rather than allowing markets to govern energy flows, it is increasingly driven by a Washington bent on bullying Europeans into making unrealistic state-directed purchases. In 2024, the total value of EU imports of coal, gas, and oil stood at €374.7 billion. The United States is already the EU’s top or second supplier – providing it with 15.0 percent of its oil, 50.7 percent of its LNG, and 31.3 percent of its coal imports for the first quarter of 2025. US coal, LNG, and oil will absorb most of the agreed-upon annual imports of €216 billion ($250 billion). Dramatically increasing imports of American oil would be the only way to fill this gap because roughly 70 percent of the total value of the EU’s energy imports comes from oil while only 11 percent comes from LNG and 3 percent from coal. Such a rise would likely see the EU importing up to half of its oil from the United States.
Such concentration would undermine diversification efforts and expose the EU to the whims of an administration pursuing American Energy Dominance. While Energy Dominance has been interpreted in different ways, conservative actors view it as more than an economic agenda. For them, it is a strategic doctrine on the basis of which the United States uses its resource output to ensure energy independence and affordable and reliable energy for America and its allies – although the definition of the latter is very unclear at this stage. Importantly, the paradigm sees energy exports as a source of geopolitical leverage and national power that will allow the United States to influence global energy prices. This calls the market logic of the global energy trade into question.
Pursuing an Energy Dominance agenda in this context is not necessarily a win for the United States either. Secure suppliers rely on their ability to form a stable, predictable, and non-coercive relationship – a foundation that this agreement erodes. While the optics create fanfare that serves political purposes, such behavior tarnishes America’s reputation as a reliable energy supplier. Politically exploiting security interests and vulnerabilities to extract economic concessions from key partners is counterintuitive to competitive markets; instead, it mirrors the rent-seeking tactics of authoritarian strongmen. The notion of “freedom molecules” rings hollow when the US government adopts the transactional, vulnerability-exploiting approach it once denounced in autocratic competitors.
The Agreement May Not Even Be Feasible
There are also doubts about whether these energy export targets are possible. As others have argued, the United States even lacks the export capacity to fulfill the prescribed volumes. American coal, gas, and oil exports totaled $318 billion in 2024, with $76 billion exported to the EU.
Pursuing an Energy Dominance agenda … is not necessarily a win for the United States
To meet the new targets without expanding exports, the United States would need to divert nearly 80 percent of exports to Europe. Rerouting shipments in this way is not possible because many of these deliveries are governed by long-term offtake contracts. Even the hypothetical case is undesirable as it would cause severe disruptions for other American allies that rely on US energy imports, such as Japan, and would lead the US to become heavily dependent on European markets. The only credible choice would be to scale export capacity. However, this cannot be achieved overnight. Doubling export capacity would take years, if not over a decade.
The trade agreement is also unclear for industry. The European economy, imports, and investments are primarily shaped by European companies that may be incentivized to buy or invest in American goods but are ultimately free in their decision-making. State-mandated energy import targets are antithetical to free markets and private energy companies on both sides of the Atlantic. European state-owned entities, such as Germany’s SEFE or Uniper, could potentially fill some of this need; however, this would contradict a market-based energy policy and still fall short of the target. In addition, American energy exporters may not meet European environmental standards, especially as US environmental frameworks are being dismantled. This goes for the EU Methane Regulation, for example, which will require new energy import contracts to meet the agreed EU standards starting in 2027.
Surging Energy Exports Could Cause Domestic Turmoil
Even if the United States could meet the scale of this agreement, there would be a cost at home. Increased energy exports reduce domestic supply and place upward pressure on prices. A January analysis from the US Energy Information Administration (EIA) projected natural gas prices at Henry Hub – a central hub in Louisiana used to benchmark North American natural gas trading prices – rising from $2.21 in 2022 to $4.00 by 2026. Nearly three quarters of this is attributed to rising LNG exports. Projections see surging exports resulting in a thirty- to eighty-percent increase in domestic gas prices. This is before even considering adding $174 billion in annual exports to Europe – which would likely double American LNG exports.
While the United States does have cheap gas, an increase even at the lower end would bear political cost. Higher gas prices translate directly into electricity and heating bills for American families and businesses. Rising costs on the latter are highly inflationary and would compound the economic uncertainty Americans already feel under Trump. Moreover, prioritizing foreign sales over domestic affordability could become an issue for an otherwise nativist political base.
Economic Coercion Spurns Strategic Autonomy and Creates Space for China
A secure transatlantic relationship cannot be engineered by decree – or by trading on moments of vulnerability for short-term advantage. Stability, predictability, and mutual respect must remain central if American energy and technology are to be trusted components of Europe’s future security landscape. Although the EU has, in principle, demonstrated a willingness to base its energy security strategy on American imports, the coercive undercurrent of this deal risks alienating the bloc. Given that REPowerEU’s three key priorities are to save energy, diversify energy supplies, and produce clean energy, the deal also risks solidifying its resolve to seek strategic autonomy. In addition, increasing tensions with the United States may propel the EU further toward decarbonization as it would reduce the bloc’s exposure to fossil fuel import dependencies.
While this ultimately supports climate targets, it also creates commercial openings for China. Unlike a Trump-led America, China appears less likely to impose overt security-related ultimatums in exchange for significant economic concessions. However, this may only seem to be the case because President Trump’s style of negotiation is often blunt while, under Chairman Xi Jinping, China’s is more methodical. China also lacks comparable leverage over European security policy despite its efforts to gain traction by expanding technology export restrictions to cover more critical minerals and technologies.
Even as Europe remains wary of Chinese industrial ambitions, the EU has little choice but to rely on Chinese technology providers for its own renewable energy supply chains, in particular batteries and wind power. This is especially true if it is determined to stay on course for its decarbonization targets. In the dilemma between two dependencies, European leaders are reminded of the need to grow their own industrial champions and accelerate domestic innovation. Otherwise, they find themselves persistently and increasingly vulnerable to economic bullying from both Washington and Beijing.
