China Halts U.S. LNG Imports Amid 49% Tariff in Ongoing Trade Dispute:

For over ten weeks, China has suspended purchases of liquefied natural gas (LNG) from the United States. In this case, their actions followed a 49% tariff placed on American LNG imports (which made it financially nonviable to purchase). This represents a deepening of energy trade relations, which were already somewhat fraught, between the two countries.

The last confirmed delivery was on February 6, when a China-bound tanker carrying 69,000 tonnes of LNG from Corpus Christi, Texas LNG was offloaded in China’s Fujian province. Soon after this, another US cargo was diverted to Bangladesh after China placed a 15% tariff, which was later upped to 49%.

Energy Analysts Forecast Long-Term Consequences For US LNG Exports
Some analysts believe this cease in imports may stand unusual for the radical trade policies of Donald Trump, but unlike previous policies will be far longer lasting. Columbia University’s Anne-Sophie Corbeau suggested buyers in China are unlikely to renogotiate new contracts for U.S. LNG, which does not bode well for American growth in exports.

Traditionally, China re-exporting U.S. LNG to other parts of the world, including Europe, but this trade suspension puts bolds on American expansion plans caps. The U.S. share of Chinas LNG imports was 11% in 2021 and 6% in 2022.

Sinopec Q4 profit report Summer After Shock

PetroChina and Sinopec remain active with 13 long-term contracts with US LNG suppliers, some of which expire in 2049. It single-handedly increased the funding for the LNG infrastructure on both US and Mexican sides. Developers are considering a change of terms for contracts because of rising inflation and tariff issues.

Analysts expect further disruptions. Gillian Boccara, a Kpler analyst pointed out that the current economic situation and the low demand for gas from China does not allow for a quick resolution unlike some of the previous disputes.

China Steps Up Energy Partnership with Russia

While trade disputes may be increasing, Russia has stepped up energy cooperation with China. Russia is now the third largest supplier of LNG to China, after Australia and Qatar. He will strengthen relations through various proposed projects, include the Power of Siberia 2 pipeline. Chinese ambassador to Russia Zhang Hanhui confirmed further plans on expanding LNG purchases from Russia.

Tariff Based Global Trade Overhaul Foreseen in the LNG Market

Increase in tariffs could cause a major realignment of trade and even enable Europe to enjoy competitively priced LNG. Richard Bronze from Energy Aspects noted that the tariffs essentially act like an embargo and can realign trade strategies.

The U.S. LNG industry is now confronting new obstacles: alongside the existing trade constraints, there are new geopolitical realignments and an overall drop in demand from Asia.