On 21 August 2025, the European Union and the United States signed an agreement that could mark a turning point in transatlantic relations.
Born out of a need to stabilise ties between the two blocs, particularly following Donald Trump’s return to the White House, the deal was presented by the European Commission as a victory for pragmatism and a guarantee of stability for European businesses. However, despite Brussels’ enthusiasm, the agreement raises serious questions about the consistency and credibility of the EU’s Green Deal ambitions.
The EU-US economic agreement: numbers, tariffs and investments
The new framework for transatlantic cooperation includes the removal of European tariffs on US industrial goods such as machinery, pharmaceuticals and fertilisers, as well as trade quotas for certain American agricultural products. In return, the US has agreed to implement a single, all-inclusive tariff ceiling of 15% on most European exports, including strategic sectors like automotive and semiconductors. For steel, aluminium and related products, further negotiations are expected; for now, these goods remain subject to tariffs of up to 50% of their value.
The agreement formalises the preliminary deal reached in Scotland in July 2025, under which the EU committed to purchasing up to $750 billion worth of US energy products by 2028, especially liquefied natural gas (LNG), oil and nuclear fuels. This is in addition to $600 billion in European investments in the US and $40 billion allocated for the purchase of American-made artificial intelligence chips.
Reactions to the EU-US trade deal
The Italian government welcomed the EU-US joint statement, while noting that it does not yet represent an ideal outcome. Sabine Weyand, EU Director-General for Trade and Economic Security and one of Europe’s chief negotiators, emphasised that the agreement is not the result of a negotiation between equals, but rather the best possible outcome under the current circumstances. The European Commission defended the deal by highlighting the relatively favourable terms secured by the EU and pointing to US security guarantees for Ukraine. European Council President António Costa stressed the interconnections between trade, diplomacy and security, warning that escalating tensions with a key ally like the US – while Europe’s eastern border remains under threat – would have been a reckless choice. Moderation, he argued, is a sign of responsibility.
Nevertheless, the strategy didn’t go without criticism. Mario Draghi described it as a form of resignation, while the French and German governments highlighted its potential economic downsides. Numerous MEPs from across the political spectrum – from the European People’s Party (EPP) to the Socialists & Democrats (S&D) and the Greens – have strongly criticised the agreement, calling it unbalanced and a concession to American pressure.
Energy and climate in the EU-US deal
From an energy perspective, the agreement presents four major concerns.
Firstly, the commitment to purchase $750 billion (around €700 billion) worth of energy products (mainly LNG) is not feasible. In 2024, the EU imported around €77 billion worth of energy goods from the US, making up roughly 21% of the Union’s total energy imports (€375 billion). To meet the agreement’s targets, this volume would need to triple within three years – – an unlikely scenario given structural constraints, such as limited regasification capacity in several Member States and competition from Asia. Moreover, the EU is not solely dependent on the US, having already secured LNG supply agreements with other producers like Qatar and Algeria, and aims to maintain supply diversification as a core principle of energy security.
Secondly, this commitment clashes with the EU’s climate goals. The REPowerEU plan targets a 25% reduction in gas imports by 2030, and gas demand in Europe is already on the decline, driven by energy efficiency, electrification of industrial and residential sectors, and the acceleration of renewables.
Furthermore, committing to purchasing US LNG could prove problematic in light of the upcoming EU methane emission regulation tied to oil, gas and coal extraction. Methane, when released directly into the atmosphere, has a far greater greenhouse effect than CO₂. That is why international initiatives like the Global Methane Pledge aim to curb methane emissions. The European regulation will require importers to ensure that their oil and gas meet specific methane intensity thresholds, to be defined by the European Commission by 2030 in line with the Green Deal objectives, with penalties for non-compliance. In the case of American gas production, methane emissions are particularly high due to the use of fracking, an extraction technique with significantly higher emissions compared to other methods, making it difficult to reconcile US supplies with the new European rules.
Thirdly, the agreement risks intensifying Europe’s geopolitical dependence on the US. The US is already the EU’s largest LNG supplier, providing about 55% of supplies in 2025. While 15 billion cubic metres of Russian gas have already been replaced by American LNG, according to the Commission, the agreement aims to fully substitute Russian supplies with US energy by 2028. This would place an increasing share of Europe’s energy security in Washington’s hands, reducing strategic autonomy and increasing exposure to external political and commercial pressure.
Lastly, the deal could jeopardise Europe’s energy transition due to its high opportunity cost. Investing in American fossil fuels would represent a foregone opportunity for equivalent investments in energy independence based on renewable sources and energy efficiency. According to the Institute for Energy Economics and Financial Analysis, investing $750 billion in renewables could allow the EU to install 321 GW of solar, 151 GW of offshore wind, and 74 GW of onshore wind power: a 90% increase in total renewable capacity.
A good deal for Italy?
Following the agreement, on 8 September in Rome, Italy’s Minister for the Environment and Energy Security, Gilberto Pichetto Fratin, signed a joint declaration with the United States. The statement aims to strengthen Italian and European energy security through greater reliance on American LNG.
In doing so, Italy reaffirms its willingness to increase US LNG imports in a highly unstable geopolitical context, presenting the transatlantic route as safer than alternative supply routes and as part of a broader strategic cooperation that includes support for Ukraine.
The declaration is largely political in nature: it does not establish any trade agreements nor specify the precise volumes or timelines for potential imports. However, oil and gas companies have already responded. Edison recently signed an agreement with Shell to purchase around 0.7 million tonnes per year of US LNG from 2028 for 15 years, equivalent to one billion cubic metres of gas per year. Last July, Eni announced a long-term LNG supply agreement with US-based Venture Global to purchase 2 million tonnes per year (approximately 2.7 billion cubic metres) for 20 years, with deliveries to Italy starting at the end of the decade. This deal was recently celebrated by Eni executives and members of the Trump administration, including the US Secretary of the Interior and the new US ambassador, during the ongoing global conference on natural gas (Gastech) in Milan.
As we highlighted in a previous analysis, given future gas demand scenarios, some of today’s available import capacity is expected to remain unused. It is therefore unclear what advantage Italy gains from locking itself into long-term, binding supply contracts for volumes that exceed actual needs. More flexible market instruments, such as LNG auctions for capacity allocation, allow for selection of quantity, price and delivery terms based on actual supply and demand. Binding regasification capacity through long-term contracts, especially those with take-or-pay clauses, carries significant risks. On the one hand, it reduces system flexibility and increases supply risk. On the other, it ties future supply ever more closely to a partner – the United States – which is using fossil fuels as a tool of geopolitical leverage.
The declaration also stresses the importance of supporting European energy diversification through the expansion of Italy’s regasification infrastructure.
However, further increasing regasification capacity in Italy has no sound energy-economic basis. Gas demand in Europe and Italy has fallen by 18% over the past three years, from around 76 billion cubic metres annually in 2021 to under 62 billion cubic metres in 2024. Our report ‘The state of gas’ shows that existing infrastructure is sufficient to ensure supply security – thanks to flows from Algeria, Azerbaijan and Libya, combined with existing regasification capacity and domestic production. New investments would add further costs to an infrastructure in transition. The rising share of renewables in competitive electricity markets, electrification of domestic consumption, savings and improved efficiency in homes, and the decline in industrial output – largely due to gas costs – paint a picture of steadily falling gas demand in Europe, with growing infrastructure costs passed on to end users. Further infrastructure expansion would only benefit the energy companies involved, at the expense of citizens’ and non-energy businesses’ utility bills.
Ultimately, neither the European Commission, the White House, nor the Italian government can dictate where US LNG ends up, as it follows global supply and demand logics. Yet the political message that the EU and Italy are sending to citizens and businesses is deeply contradictory: on the one hand, they claim to want to lower energy prices, which are stifling the economy and largely driven by gas costs. On the other, they continue to sign deals and declarations with the US and other countries that risk locking Europe and Italy into gas far longer than necessary. If Europe and Italy are serious about achieving strategic autonomy, competitiveness and social sustainability, then the path forward must be a planned, orderly exit from gas.
Photo by Chris Pagan
