US Tariffs and Global LNG Trade Implications
- Timothy Beggans
- Feb 10
- 2 min read
The Trump administration’s proposed tariffs have reignited concerns about their impact on global liquefied natural gas (LNG) trade. While the US remains a dominant LNG exporter, China’s response—a 15% retaliatory tariff on US LNG imports—raises questions about long-term market stability.
China’s Measured Response and Negotiation Strategy
Despite the tariff, US LNG remains competitively priced compared to alternative sources, ensuring continued Chinese demand. In 2024, China imported $2.4 billion worth of US LNG—a fraction of the $163.6 billion in total US imports. This suggests that Beijing’s tariff is more of a strategic move than an outright barrier. By delaying implementation until February 10 (today), China appears to be buying time for potential trade negotiations, especially as its economy struggles and energy security remains a priority.
High European Gas Prices Buy Time for US-China Talks
Europe’s high gas prices provide the US with a temporary cushion against potential losses in the Chinese market. However, uncertainty over Chinese tariffs could make Chinese firms hesitant to commit to new long-term US LNG contracts. This is particularly concerning for US LNG projects that were expected to take final investment decisions (FID) after President Trump lifted the pause on LNG export permits.
Impact on Existing and Planned US-China LNG Agreements
The US-China LNG trade relationship is significant, with over 17 million tonnes per annum (mtpa) of LNG contracts already in place for projects under construction. Major Chinese buyers, such as CNOOC, Sinopec, and PetroChina, have secured long-term LNG supply deals with US exporters like Cheniere, Venture Global LNG, and NextDecade.
However, uncertainty over tariffs could disrupt planned LNG investments. Chinese companies are currently involved in negotiations for an additional 7.1 mtpa of LNG from future US projects, including Lake Charles LNG, CP2, and the SPL Expansion Project. If trade tensions escalate, these projects could face delays or cancellations, affecting US export capacity and global supply chains.
Balancing the Benefits and Risks
Benefits: The tariffs could strengthen the US negotiating position in broader trade discussions and encourage diversification of LNG buyers beyond China.
Risks: Uncertainty in US-China trade relations may deter investment in US LNG infrastructure, slowing long-term industry growth. Additionally, reduced Chinese demand for US LNG could shift global supply chains, benefiting competitors like Qatar and Australia.
As trade negotiations unfold, the global LNG market will remain highly sensitive to US-China policy shifts. The coming months will reveal whether tariffs lead to meaningful trade concessions or disrupt US LNG expansion plans.
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