Trump's "reciprocal tariffs" have caused a huge impact on all countries and industries around the world.
In the energy sector, the export of the new energy industry chain has been continuously under pressure, and the photovoltaic and lithium battery sectors in the stock market have suffered heavy losses, highlighting the panic sentiment in the market. In terms of imports, with China's successive implementation of countermeasures, the LNG (liquefied natural gas) market is also undergoing changes.
Although China has been vigorously developing clean energy in recent years, fossil fuels still support the operation of society and the economy. In terms of resource endowment, China is "rich in coal, short of oil, and scarce in gas", highly dependent on imports for oil and natural gas. As a major producer of oil and gas, the U.S. has also exported many oil and gas products to China. However, in recent years, affected by trade disputes, geopolitical situations, and changes in American politics, the import volume from the U.S. in crude oil trade (China is the largest crude oil importer in the world, accounting for more than 12% of total import trade) fell by 46% year-on-year last year, and the U.S. also dropped out of the top 10 as an import source.
However, at the same time, with China promoting the application of relatively clean fossil fuels such as LNG heavy trucks and gas power generation, demand for LNG continues to grow, and in 2021 it surpassed Japan to become the world's largest LNG importer.
After achieving a large expansion in LNG production capacity, the U.S. has now become the world's largest LNG exporter, with Shell even predicting that in about five years, the U.S.'s LNG exports will account for one-third of global supply. Against this backdrop, China's imports of LNG from the U.S. have also shown significant growth. According to statistics from the General Administration of Customs, in 2024, China imported a total of 4.25 million tons of LNG from the U.S., a year-on-year increase of 48.3%, with an import value reaching 17.15 billion yuan RMB, accounting for approximately 5.5% of the total import value. The U.S. has surpassed Indonesia to become China's fifth-largest LNG supplier.
But Trump's rise to power completely disrupted this favorable trade momentum.
Although Trump has always claimed to expand U.S. oil and gas exports, LNG is also an important part. At the same time, his actions of imposing tariffs everywhere have aroused dissatisfaction and counterattacks from various countries, clearly putting pressure on exports in all fields of the U.S.
In fact, as early as February 1, before the announcement of the "reciprocal tariffs," Trump announced a 10% tariff on Chinese products entering the U.S. due to issues related to fentanyl, and China immediately took a series of countermeasures, including adding a 15% tariff on LNG originating from the U.S.
Through the statistics from the General Administration of Customs for January and February this year, it can be seen that the U.S. has fallen to seventh place among the sources of imports. Although during this period the overall import of natural gas in China has decreased (affected by weather, demand, and prices, etc.), the import volumes of the top six sources have decreased by about 16% year-on-year, and the import values have decreased by less than 19%. However, the import volume and import value from the U.S. have both plummeted by more than 43% year-on-year. These data alone may not fully reflect the impact of the "tariff shock" (the March import and export data from the General Administration of Customs has not yet been updated). Previously, Longzhong Information had predicted that even considering only a 15% import tariff, the average price of U.S. LNG would already exceed the domestic receiving station's outgoing price. With the continuous increase in tariffs, it is expected that more oil and gas companies will abandon direct imports from the U.S.
Previously, Bloomberg reported that China's oil and gas companies are increasingly inclined to resell imported U.S. LNG contracted to Europe and other regions.
According to a report published by Reuters on April 8, multiple platform data shows that China did not import any U.S. LNG in March. Alex Siow, an analyst from the commodity information service provider IHS Markit, said that due to the continuous increase in tariffs, the mindset and decision-making of Chinese importers have shifted from "we want to try reselling U.S. LNG to Europe" to "we must resell all U.S. LNG." Other data shows that so far, the amount of U.S. LNG resold by Chinese importers has reached about 70% of last year's total.
However, according to Jinlian United's analysis, the long-term and comprehensive impact of the additional tariffs on China's LNG market is limited. China's major oil and gas companies have also actively adjusted their strategies and may increase imports from Australia, Malaysia, Indonesia, and other Asia-Pacific regions or from Qatar and other Middle Eastern regions in the future.
Previously, Hou Mingyang, deputy director of the Planning Institute of China Petroleum Exploration and Development Research Institute, wrote an article pointing out that considering the current complex international market trends and potential risks facing U.S. LNG trade, it is recommended that China's energy enterprises continue to enhance the diversification of LNG import sources, ensure safe supply and economic efficiency through market-oriented means, and intensify research on the ratio relationship between long-term contracts and spot imports of LNG, while doing relevant work for signing long-term contracts for LNG. At the same time, efforts should also be further increased in domestic natural gas exploration and development, and accelerating the reform of the domestic natural gas pricing mechanism. (This article was first published on the Tiemei APP, author | Hu Jiamei, editor | Liu Yangxue)
Original source: https://www.toutiao.com/article/7491233114409239050/
Disclaimer: This article solely represents the author's personal views. Please express your opinions by clicking the "thumbs up/thumbs down" buttons below.