Jan 23, 2025
U.S. President Donald Trump did not impose tariffs on Chinese exports on Day 1 of his return to office.
But Trump directed the United States Trade Representative to review the Economic and Trade Agreement signed during the President’s first term. The review of the deal with China would help the new U.S. administration determine whether China is acting in accordance with this agreement. Following the review, the United States Trade Representative “shall recommend appropriate actions to be taken based upon the findings of this review, up to and including the imposition of tariffs or other measures as needed,” the President’s America First Trade Policy memo says.
In the trade war during President Trump’s first term in office, China stopped buying any U.S. LNG for a year. The trade war that started in 2018 decimated American LNG exports to China after Beijing slapped tariffs on the super-chilled fuel in retaliation to U.S tariffs on billions of U.S. dollars worth of Chinese goods. Back then, Trump reached a so-called ‘Phase 1’ trade agreement with China in 2020, under which Beijing was to boost its purchases of American goods by $200 billion in the following two years.
With Covid and its repercussions on Chinese and global economies, China failed to reach that target, which included Beijing buying more U.S. manufactured goods, agricultural products, and energy. The shortfall in the energy purchases target was the biggest—China managed to buy just one-third of the volumes it has pledged, according to U.S. Census Bureau data cited by Bloomberg.
China was supposed to purchase billions of dollars’ worth of oil, coal, and LNG. Even before the pandemic, analysts had largely concurred that the Chinese promise to buy an additional $52.4 billion worth of U.S. energy products in 2020 and 2021 on top of the 2017 levels of Chinese energy imports was most likely unachievable, even if China intended to fulfill all its pledges in the deal.
Since then, China has diversified its energy imports – a pipeline from Russia is now delivering large volumes of gas, while China has become a top buyer of Russian oil, cheap at that, after Russia lost the Western oil markets.
Gazprom started sending gas to China via the Power of Siberia pipeline at the end of 2019, and flows have now reached the maximum design capacity.
With most of the European market now closed for Gazprom, the Russian gas giant is now betting big on China and its surging natural gas demand to offset the loss of sales that were previously going to Europe.
Following the 2022 energy crisis and China’s efforts to diversify oil and gas supply, Beijing has signed long-term LNG deals, including with American exporters.
Cheniere Energy, for example, has signed a long-term deal with China’s ENN to deliver LNG to the Chinese buyer for more than 20 years beginning in 2026—the second such deal between Cheniere and ENN.
But China also has agreements with Qatar, the world’s second largest LNG exporter after the United States.
Compared to Trump’s first term, China now has more options to procure enough natural gas supply, including from Russia and the United States.
Buyers have contracted millions of tons of LNG from the U.S. with deliveries expected to begin from 2026.
China has the option to boost U.S. LNG imports even further.
The question is whether it would choose to do so and engage in trade negotiations or continue using its rare earths and key minerals dominance with export restrictions of critical minerals such as gallium, germanium, and antimony, which have military applications, among others.
oilprice.com
- China's focus on diversifying its energy imports and securing long-term LNG deals could reduce its reliance on U.S. energy.
- The Trump Administration's threat of tariffs and the review of the existing trade agreement may not be enough to incentivize China to increase U.S. energy purchases.
- China's growing energy relationship with Russia and its existing LNG agreements with Qatar present challenges for U.S. energy exporters.
U.S. President Donald Trump did not impose tariffs on Chinese exports on Day 1 of his return to office.
But Trump directed the United States Trade Representative to review the Economic and Trade Agreement signed during the President’s first term. The review of the deal with China would help the new U.S. administration determine whether China is acting in accordance with this agreement. Following the review, the United States Trade Representative “shall recommend appropriate actions to be taken based upon the findings of this review, up to and including the imposition of tariffs or other measures as needed,” the President’s America First Trade Policy memo says.
In the trade war during President Trump’s first term in office, China stopped buying any U.S. LNG for a year. The trade war that started in 2018 decimated American LNG exports to China after Beijing slapped tariffs on the super-chilled fuel in retaliation to U.S tariffs on billions of U.S. dollars worth of Chinese goods. Back then, Trump reached a so-called ‘Phase 1’ trade agreement with China in 2020, under which Beijing was to boost its purchases of American goods by $200 billion in the following two years.
With Covid and its repercussions on Chinese and global economies, China failed to reach that target, which included Beijing buying more U.S. manufactured goods, agricultural products, and energy. The shortfall in the energy purchases target was the biggest—China managed to buy just one-third of the volumes it has pledged, according to U.S. Census Bureau data cited by Bloomberg.
China was supposed to purchase billions of dollars’ worth of oil, coal, and LNG. Even before the pandemic, analysts had largely concurred that the Chinese promise to buy an additional $52.4 billion worth of U.S. energy products in 2020 and 2021 on top of the 2017 levels of Chinese energy imports was most likely unachievable, even if China intended to fulfill all its pledges in the deal.
Since then, China has diversified its energy imports – a pipeline from Russia is now delivering large volumes of gas, while China has become a top buyer of Russian oil, cheap at that, after Russia lost the Western oil markets.
Gazprom started sending gas to China via the Power of Siberia pipeline at the end of 2019, and flows have now reached the maximum design capacity.
With most of the European market now closed for Gazprom, the Russian gas giant is now betting big on China and its surging natural gas demand to offset the loss of sales that were previously going to Europe.
Following the 2022 energy crisis and China’s efforts to diversify oil and gas supply, Beijing has signed long-term LNG deals, including with American exporters.
Cheniere Energy, for example, has signed a long-term deal with China’s ENN to deliver LNG to the Chinese buyer for more than 20 years beginning in 2026—the second such deal between Cheniere and ENN.
But China also has agreements with Qatar, the world’s second largest LNG exporter after the United States.
Compared to Trump’s first term, China now has more options to procure enough natural gas supply, including from Russia and the United States.
Buyers have contracted millions of tons of LNG from the U.S. with deliveries expected to begin from 2026.
China has the option to boost U.S. LNG imports even further.
The question is whether it would choose to do so and engage in trade negotiations or continue using its rare earths and key minerals dominance with export restrictions of critical minerals such as gallium, germanium, and antimony, which have military applications, among others.
Can the U.S. Compete with Russia and Qatar in China's Energy Market? | OilPrice.com
China's pursuit of energy security and diversification may limit the potential for a successful energy trade deal with the Trump Administration.
oilprice.com
