This was long coming. Because in March, the US President announced 25 per cent tariffs on countries importing oil from Venezuela, making it clear that oil/ energy ‘dominance’ is his aim.
But, he recently paused higher tariffs for most countries, well, except China, giving them a 90-day breather to negotiate and strike individual trade deals. The message is clear: energy imports from the U.S. could be a ticket to better trade terms.
“They’re going to have to buy our energy from us, because they need it,” CNBC quoted Trump as saying at the White House. “We can knock off $350 billion in one week,” he added, referring to the U.S. goods trade deficit with the European Union, which stood at $235.6 billion in 2024. He demanded the EU buy $350 billion worth of American energy to offset its surplus. The EU faces a 20% tariff if it doesn’t reach a deal.
The U.S. is already the largest LNG exporter in the world. According to Barclays, LNG is “the commodity where there’s room for countries to increase their energy imports from the US.” In 2024, the EU bought 39 per cent of U.S. LNG exports, followed by Japan (7 per cent) and South Korea (6 per cent).
‘Christmas’ in Alaska
Meanwhile, Treasury Secretary Scott Bessent told CNBC that countries like Japan, South Korea, and Taiwan could invest in Alaska’s major LNG project to secure a deal. “That could be an alternative for them to come forward with that because not only would that provide a lot of American jobs, but it would narrow the trade deficit,” Bessent said.Japan and South Korea are facing 24 per cent and 25 per cent tariffs respectively.Trump has long pushed for Alaska’s energy development, especially the $40 billion Alaska LNG project. It would move gas from the North Slope to a liquefaction facility at Nikiski for export to Asia.
Alaska’s Governor Mike Dunleavy welcomed Trump’s return, saying, “happy days are here again” and calling the administration’s energy stance “Christmas every day.”
But the picture isn’t so cheerful in practice. Falling oil prices and uncertainty over federal funding have left Alaska in a budget crunch. North Slope oil, once $90 a barrel, dropped to as low as $65 this week. That’s a big hit for a state that relies heavily on oil revenues — every $1 change in price means $35–$40 million lost.
“We’re all in a pickle,” said House Speaker Bryce Edgmon, an independent, as lawmakers scramble to close budget gaps before their session ends in May — right around the time Trump’s tariff pause expires.
At the center of Alaska’s fiscal fight is the state’s oil wealth fund. Governor Dunleavy proposed a $3,800 dividend per resident, costing $2.5 billion, but lawmakers say it’s unrealistic. Last year, Alaska residents received a combined dividend and energy relief payment of $1,702. Over the past five years, payouts have ranged from a low of $992 in 2020 to a high of $3,284.
“We cannot pay an unsustainable dividend, and that dividend distorts the fiscal reality that we’re facing,” said House Majority Leader Chuck Kopp, a Republican. “Do we need new revenue, or do we need to get a handle on the size of the dividend we’re paying and honestly figure out how we’re going to prioritize that?”
Schools are asking for more funds as inflation and infrastructure issues pile up. Meanwhile, the state has already spent billions from savings to cover deficits.
