Following President Donald Trump’s announcement of reciprocal tariffs, gas prices in Europe sharply declined. Within a week, there was a 20% drop in natural gas prices.

Amid escalating tensions and concerns about the global economic slowdown that reciprocal tariffs could cause after President Trump announced them, gas prices in Europe dropped by 20% within a week. In Europe, the most depth-based center for virtual natural gas trading, TTF, located in the Netherlands, closed at 41.2 euros per megawatt-hour on April 2. Since the announcement of reciprocal tariffs by President Trump on April 2, which he termed as a “day of salvation” for his country, gas prices in Europe sharply declined. The gas price per megawatt-hour in Europe started at 39.2 euros on April 3, continuing its losses into the new week. The escalation of tariff retaliation between the U.S. and China also accelerated the speed of price declines. As a result, gas prices in Europe plummeted by 20% after April 2, and saw a further 9.2% decrease at the beginning of this week. With this decline, gas prices dropped to their lowest level since May 2024.

FEAR OF FALLING GAS DEMAND
Predictions of a global economic slowdown following the tariffs and concerns that this slump will weaken gas demand triggered the drop in prices. Additionally, expectations that following China’s retaliatory tariffs against the U.S., U.S. liquefied natural gas (LNG) supplies might shift more towards Europe than China and Asia also influenced the decline in gas prices. Furthermore, the slowdown in economic growth in China post the tariff retaliation with the U.S., especially the downward trend in gas consumption in the industry, raised concerns about China’s total gas demand. Investment bank Goldman Sachs lowered its growth forecast for the Chinese economy this year to 4% and to 3.5% in 2026 due to the economic impacts of the tariffs. The bank had previously predicted that the Chinese economy would grow by 4.5% this year and by 4% in 2026. Subsequent to the latest announcements between the U.S and China, post an 84% retaliatory tariff by China on the U.S., the U.S. announced a 125% tariff on China under a reciprocal tariff basis. The “tit for tat” approach between the two countries is increasing uncertainties regarding the global economy and trade.