Trump’s tariffs could sink gas deal with Europe, top energy boss warns

TALLINN — U.S. President Donald Trump's tariff plans could actually undermine his hopes of shipping more fuel to Europe, the continent's leading gas executive is warning.

Brussels is hoping to negotiate more purchases of American liquefied natural gas (LNG) to appease Trump and help avert a full-blown trade war. But in an interview with POLITICO, Cristian Signoretto, director at Italian multinational energy giant Eni and president of the Eurogas trade association, cautioned that American supplies would become less competitive if planned tariffs take effect following a 90-day pause.

"From an industry perspective, there is absolutely interest in signing more long-term deals," said Signoretto, whose company is the second-largest fossil fuel importer in the EU and would be key to Brussels' hopes of increasing purchases of American LNG.

That said, "there are some issues when it comes to the cost of tariffs on those projects. Those projects are multi-billion dollar investments in the U.S., and if you have tariffs on steel, on procurement, on imported goods, this might then turn them into more costly investments."

That prospect has European firms fretting.

"As an industry, we are a bit worried that this might kick in and increase the costs of buying U.S. LNG, and that is a bit of a worry for industrial players," Signoretto said.

EU officials are holding closed-door talks with their American counterparts on how the bloc can increase its purchases of LNG after the White House demanded they address a supposed imbalance in trade volumes. Current proposals include aggregating demand from European companies to place large collective orders with U.S. suppliers, as well as helping firms invest in overseas gas export infrastructure — a move that has drawn ire from climate campaigners.

Signoretto, however, was skeptical that "central procurement" of gas by the EU would be beneficial, because "Europe has been based on this principle — the free market — and we think this is still the right way to address these issues."

Instead, he said, Brussels should focus on relaxing barriers to buying American gas, including upcoming rules designed to cut emissions of planet-warming methane that oil and gas producers release. Trump has been cutting environmental requirements, and the private sector has argued that penalizing importers could compromise efforts to buy more fuel from the country.

"I would rather the European Commission focus on engaging proactively and constructively with U.S. counterparts to find a solution whereby, for example, we could deem U.S. LNG automatically allowed under the methane regulation so that people can then sign up for deals, because this uncertainty discourages people signing long-term contracts," Signoretto said.

Top European energy companies — including Eni, BP, Engie and Repsol — made the same argument in a letter sent this week to EU officials, calling on them to "urgently" reappraise the bloc's methane rules and delay the implementation of financial penalties to avoid "compromising Europe's energy security."

European diplomats have previously cautioned that Trump's proposed tariffs — including a 20 percent fee on all imports from the EU — would decrease Europe's industrial output, reducing the need for gas and making it harder to reach any deal on buying more supplies. Unless canceled, the tariffs will take effect from July.

Those with knowledge of the backroom negotiations have also expressed frustration that the U.S. administration seems disinterested in striking an LNG agreement, despite political will in Brussels.