China Raises Tariffs on US LNG
China announced May 13 that it will raise tariffs on US LNG and other energy imports.
As part of President Donald Trump’s ongoing trade war with Beijing, the US raised tariffs on $200bn/yr of Chinese goods from 10% to 25% May 10. Retaliating, China said it will match the move. Amongst US energy commodities, only crude oil will escape the rise, which will take effect June 1.
China became the world’s largest net gas importer in 2018, and the second-largest importer of LNG. Imports of the liquified fuel rose by over 40% year on year to around 54mn mt, and Beijing has said it plans to quadruple purchases over the next two decades. However, with the 10% tariff attached, Chinese imports of US LNG fell by close to 80% year on year in the first quarter of 2019.
China's commerce ministry laid the blame squarely at the White House door. The rise of US tariffs will lead to "escalation of Sino-US economic and trade frictions, contrary to the consensus between China and the US on resolving trade differences through consultations, jeopardizing the interests of both sides and not meeting the general expectations of the international community," it said in a statement.
Compromise in the US/China trade war appears unlikely. The US was due May 13 to start an administrative process for imposing the higher 25% tariff rate on the remaining $325bn/yr imports from China, according to officials.