China`s new list of $60 billion worth of tariffs on U.S. goods includes liquified natural gas. a threat that if fulfilled would be a major setback for the Trump administration’s ambition to flood the world with cheap natural gas as a key component of its energy dominance agenda.
The Chinese government will hit an estimated $60 billion in U.S goods with levies from between levels of 5 to 25 percent. its finance ministry said Friday.
As part of that. China says it would impose a 25 percent tariff on U.S. liquified natural gas. or LNG — the chilled. liquid form to which gas must be converted for shipment in giant tanker vessels across the sea.
The move is in response to President Trump directing his trade policy team to hike tariffs on China to 25 percent in an effort to get Beijing to make concessions. The Trump administration had originally planned tariffs of just 10 percent on $200 billion of goods.
Experts have warned that Trump’s trade war with China is threatening to discourage the world’s fastest growing LNG market from signing long-term contracts with American developers.
`Major escalation of energy trade wars.` said Jason Bordhoff. a former energy adviser to former President Barack Obama. and the director of Columbia University`s Center on Global Energy Policy.
`The LNG flows are fungible. true. but it may hurt the ability of US projects to attract financing if world`s second-largest LNG buyer is essentially off limits.` Bordhoff wrote in a Twitter post.
China’s demand for LNG is soaring. and it is relying more on the U.S.. becoming the third largest destination for American gas behind Mexico and South Korea. Chinese imports of U.S. LNG increased from zero in 2015 to 17 billion cubic feet in 2016. to 103 billion cubic feet last year.
But the trade fight with China hangs over potential long-term progress for U.S. LNG exports.
Other countries. including Russia. Qatar. Canada. and Mozambique are also offering LNG at competitive rates. Experts say U.S. supply. despite its cheap prices. is replaceable.