Trump says the European Union must buy American oil and gas as part of a trade ultimatum

US President-elect Donald Trump told the European Union on Friday it must narrow its trade gap with the US through oil and gas purchases or face tariffs.

“I have told the European Union that it must make up its enormous deficit with the United States by purchasing our oil and gas on a large scale. Otherwise it’s tariffs everywhere,” Trump posted shortly after 1 a.m. on his Truth Social UND platform.

Accordingly US numbersThe country’s trade deficit in goods and services with the European Union amounted to $131.3 billion in 2022.

Trump threatened comprehensive tariffs on US trading partners including China, Mexico and Canada a crucial part of his presidential campaign — and he has continued the narrative as he prepares to take office Economists warn Risks to domestic inflation.

Analysts say there is much uncertainty about how high the tariffs Trump will be willing or able to impose and how much of his rhetoric is a starting point for striking deals.

Enrico Letta, former Italian prime minister and dean of the IE School of Politics, Economics and Global Affairs, told CNBC’s “Squawk Box Europe” on Friday that the EU must be prepared for retaliation to Trump’s threat.

“I think it’s a transactional approach, we have to respond to that transactional approach. “(Trump) is conflating energy and tariffs on goods, production, etc. I think that’s wrong because the two issues are completely different,” Letta said.

“If the Trump deal is proposed – such an asymmetrical deal on issues that are unrelated – I think we need to do the same thing.”

“Considering that the most asymmetrical part is the relationship on the financial side, we have to think about whether an answer on the financial side could perhaps be a solution,” he added.

The US was the largest recipient of EU goods in 2023 19.7% of its exports.

CNBC has reached out to the European Commission for comment.

This breaking news story will be updated shortly.