Trade war hits $1.1 billion of U.S. LNG export to China

By Maggie Kuang, BloombergNEF

U.S. LNG exports to China totaled $1.1 billion
i​​​​n 2018

The U.S. - China trade war is escalating, with China announcing a 25% tariff on U.S. goods, including LNG, from June 1, 2019. The impact of hiking the LNG import tariff from 10% to 25% will be minimal as China has substantially reduced U.S. LNG imports after tariffs were imposed last year.

Under the 25% tariff, contracted U.S. LNG would be uncompetitive for Chinese buyers, compared to oil-linked contracts. On a short-run basis, the higher tariffs cut – or even eliminate – margins U.S. exporters might generate by sending LNG to China, if they have to absorb the tariff. New U.S. supply projects looking to take final investment decisions this year and next will face strong headwinds. China has substantially diversified its LNG supply already, though some minimum U.S. LNG exports to China will continue.

Impact of China LNG Tariff on U.S. LNG