Will Chinese Tariffs Hurt U.S. LNG?
Nikos Tsafos, Center for Strategic and International Studies, May 15, 2019
On May 13, China announced that it would increase tariffs on many U.S. products, including liquefied natural gas (LNG). This the second time that China has targeted U.S. LNG: it set a 10 percent tariff in September 2018, which reduced flows to almost zero. The new tariff, at 25 percent starting June 1, will likely end the LNG trade between the two countries (for now). This escalation is widely interpreted as a major blow to U.S. LNG exports. It is certainly a blow, but even that statement should be followed by several asterisks. Since 2010, when the United States emerged as a prospective LNG supplier, U.S. exporters have tried to secure long-term sales contracts with Chinese customers—but to little avail. There were various attempts over the years, although mostly with second-tier players, rather than the big three Chinese national oil companies (CNPC, Sinopec, and CNOOC). But the deals were never consummated. The sense was that the Chinese companies, which were perfectly willing to sign long-contracts with everyone else, simply did not trust the United States. No amount of lobbying and reassurance from the U.S. side changed that fact.
From the Washington Examiner, Daily on Energy:
TRUMP CALLS THE GREEN NEW DEAL A ‘HOAX’: Trump attacked the Green New Deal Tuesday, claiming the progressive plan to fight climate change “might be a bigger hoax” than the Russian investigation.
“The Green New Deal is a hoax like the hoax I just went through,” Trump said during his speech in Louisiana. “I’m not sure, it might even be a bigger one. And mine was pretty big.”
Trump told the audience of energy industry workers that if the Green New Deal were implemented, “everybody in this room gets fired” because backers of the plan “don’t like clean, beautiful natural gas.”