The US-China “trade war” has now moved into the liquefied natural gas (LNG) business as the Chinese Ministry of Finance proposed a new set of tariffs on imported goods from the United States, including the chilled fuel.
The proposed 25 percent tariff, among a long list of others, comes as a response to the measures imposed on some $200 billion worth of imports from China, by the US government on July 11.
The US government said on August 2, it would increase the tariffs from 10 percent to 25 percent, Chinese ministry said in its statement on Friday, August 3, adding that the “US measures have deviated from the consensus of the two sides.”
As a result, China’s State Council Customs Tariff Commission has decided to impose tariffs on 5,207 tax items totaling some $60 billion in import trade volumes, including LNG, that would face a 25 percent tariff.
The United States are expected to join the circle of the world’s top LNG exporters soon, however, the plans to ship their product to China could be hampered by the latest development.
According to data provided to LNG World News by VesselsValue, China has slowed its crude oil purchases from the United States, and the ship movements from the United States to China have dropped significantly.
However, the VesselsValue analysts note the US-China trade war is still too young to say it is causing a structural shift, and as the other Asian countries have also slowed their imports, the cut could be attributed to seasonality.
Data from the United States Department of Energy shows that China imported some 13.7 percent of US-produced LNG volumes from February 2016 through May 2018, totaling 179.6 billion cubic feet of natural gas, falling behind Mexico and South Korea only.
Currently, two projects, Cheniere’s Sabine Pass export facility in Louisiana and Dominion’s Cove Point LNG plant in Maryland, are exporting LNG with a number of projects in the pipeline, expected to begin exports over the coming years.
According to the VesselsValue data, only three cargoes from the United States landed in China in the last June and July.
By Adnan Bajic