News Wires — China said on Monday it would raise tariffs on liquefied natural gas (LNG) imports from the United States amid a series of additional levies, a move that could further reduce U.S. LNG shipments to the world’s fastest growing importer of the fuel.
So far this year, only two vessels have gone from the United States to China, versus 14 during the first four months of 2018 before the start of the 10-month trade war.
On Monday, China said it would boost the tariff on U.S. LNG to 25% starting June 1 versus the current rate of 10%.
That move came in retaliation for a U.S. increase on Friday in tariffs on $200 billion in Chinese goods to 25% from 10%.
Natural gas is seen as a bridge between current worldwide use of much dirtier coal for power generation and industrial uses, and renewable fuels, because it burns cleaner. It has seen massive growth in sales as LNG – the supercooled form of the gas – in recent years, particularly to Asian nations seeking to reduce their dependence on coal.
The United States, meanwhile, is the fastest-growing LNG exporter in the world, and is expected to rank third in exports in 2019 behind Qatar and Australia. Abundant supplies of natural gas have kept prices low, feeding demand for projects for both domestic consumption and export.
So far, the biggest U.S. LNG producer, Cheniere Energy Inc , has not expressed major concerns about the trade war. Last week, Cheniere, which owns two of the three big operating U.S. LNG export terminals, said the trade war is “unproductive and creates some added costs for our Chinese consumers,” but it has not yet materially affected sales.