August 13, 2025
By: Susanne Nies
NATIONAL INTEREST
The US-EU trade deal’s $750 billion energy pledge is politically risky, economically implausible, and at odds with Europe’s climate and energy security goals.
During an extraordinary summit in Scotland, from July 27-28, 2025, European Commission president Ursula von der Leyen and US President Donald Trump agreed on the so-called US-EU trade deal, a trade agreement between the European Union (EU) and the United States. Key provisions are a 15 percent tariff ceiling on EU exports to the United States, covering sectors such as cars, semiconductors, and pharmaceuticals. However, the 15 percent rule also has several exemptions, including aircraft parts, chemicals, critical raw materials, and others, such as steel and aluminium, which will continue to face the elevated 50 percent tariff maintained, at least for now. Von der Leyen also committed to purchasing US energy products worth approximately $750 billion over three years (equivalent to around $250 billion per year from 2025 to 2027), and to invest $600 billion into the US economy, including in military equipment.
Mixed Reactions in the EU
The assessment of the deal in the EU remains controversial, with its supporters claiming that the worst outcome has been prevented for the EU (such as a 30 percent tariff) and that the business certainty it provides is a positive outcome. Yet, critics stress that the deal is solely to the advantage of the United States. It is also obvious that several sector-specific or legal provisions have yet to be finalised, and trade governance has changed significantly, with the Trump administration privileging unilateral and bilateral approaches over multilateral governance across the World Trade Organization (WTO) and its 166 members. The new approach is one of “might makes right” and is not compatible with the normative approach of the EU, itself an expression of successful multilateralism.
Why the Energy Commitments Are Unrealistic
The energy aspect of the deal is unrealistic, for the following reasons: there is no central EU purchasing power of energy products; it is unlikely that the United States will export most of its energy products to the EU, or that the EU will purchase most of its energy imports from the United States; EU imports are decreasing as the bloc transitions towards climate neutrality; and a new dependency on the United States for energy imports would raise energy security concerns.
Firstly, there is no central EU purchasing power. The European Commission cannot oblige EU member states and their companies to invest in the US economy or to purchase US energy products.
Secondly, the United States cannot divert most of its exports to the EU, nor can the EU import most of its energy from the United States. In 2024, EU energy imports from the United States were only worth $70-$80 billion. How, then, can the EU realistically triple or quadruple imports of liquified natural gas (LNG), oil, or coal from the United States? According to Eurostat, the EU imported energy products, including oil, gas, and coal, worth $473 billion in 2024, a 16 percent decline from 2023. Thus, if the EU were to experience a further 16 percent decline in 2025 and also in 2026, then the EU would only import US energy products worth a total of $367.8 billion in 2025 and $308.7 billion in 2026. This would mean that the EU would need to import nearly 70 percent of its energy from the United States. Even if the EU Commission could oblige all member states to purchase energy products from the United States almost exclusively, the foreseen amount of $250 billion still cannot be reached.
Commodity-Level Realities
This becomes clear when looking at commodities. In 2024, the United States supplied 17 percent of all EU oil imports and 31 percent of coal imports, the second-largest country after Australia. On gas, the United States supplied about 45 percent of all LNGimports; however, LNG made up only 34 percent of EU gas imports, with the remaining 66 percent being supplied by pipeline gas from Norway, Algeria, and, still, Russia. While pipeline gas contracts are typically long-term (around 20 years) and cannot be ended easily, coal and oil follow the global market rules. How can this setting be overcome through political decisions? Drastic taxes favoring US imports and disadvantaging imports from all other geographies could theoretically be an action to take. Yet, from an EU perspective, such action would fail to find member states’ agreement, as the economic and welfare implications are very high, and because high dependency on the United States is perceived as a risk by several EU member states.
Climate and Energy Security Risks
Thirdly, the EU climate agenda pledges to reduce fossil fuel consumption and largely increase the share of renewables and energy efficiency. An ambitious 55 percent emission reduction target is set for 2030, requiring consistency on the next steps of a post-fossil-fuel agenda. With gas consumption set to decline, in line with the REPower EU Plan, it is therefore not surprising that environmental nongovernmental organizations (NGOs) and climate policy experts have criticized the deal as inconsistent with the EU’s climate framework and the goal of climate neutrality by 2050.
Fourth, energy security: a move towards 70 percent dependency on the United States for imports of energy products would create, from an EU perspective, a new dependency that is reminiscent of the recent turmoil experienced with Russia. The United States is perceived as highly unpredictable since the new administration took office, so such a dependency does not offer any comfort to the EU’s 480 million citizens. Moreover, the argument that the EU should diversify away from Russia is put in question by the ongoing discussions between Russia and the United States about potential gas deals, whereby the United States would buy Russian gas at the Western border of Russia and sell it to the EU as American gas. The continued discussion of reviving Nord Stream and the consistent rumours that investors close to the US president are keen to buy the company add to EU scepticism.
A Step Backward in the Energy Transition
During previous US administrations, such as Biden and Obama, partnerships on innovative clean tech had been discussed. The energy aspect of the US-EU trade deal represents not only a turnaround on the energy transition and climate agenda, back toward the carbon-intensive energy system that the EU (and previously the United States) has been desperate to leave behind, but also corresponds to replacing a market-based economy with a planned one. Imports from the US—especially LNG—have been crucial, together with the pipeline gas from Norway, or Algeria, in helping the EU to diversify away from Russia when the full-scale invasion of Ukraine started in February 2022. Yet, the purchase of fossil energy from the United States in the agreed volumes is highly unrealistic and does not align with the interests of EU member states.
About the Author: Susanne Nies
Susanne Nies is a project lead at Helmholtz Zentrum in Berlin. She is an expert in electricity, energy, and climate and has been working extensively on the European Union and Eastern Europe. A German national, she holds a PhD and a habilitation from Bonn University, Berlin Free University, and Sciences Po Paris, as well as a degree in economics from the London School of Economics. Susanne is fluent in English, French, and Russian, in addition to German.
Image: donfiore/Shutterstock
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