Tariff on US LNG may reshuffle global market
China's tariff on exports of US liquefied natural gas could price the United States out of the Chinese market and rearrange the global market, warned some US industry leaders and experts.
China announced on Tuesday retaliatory tariffs on an additional $60 billion worth of US imports, including a 10 percent tariff on LNG, effective Monday.
China's announcement came after the US said on Monday it would implement a 10 percent tariff on an additional $200 billion worth of Chinese imports as of Monday.
Charlie Riedl, executive director at the Washington-based Center for Liquefied Natural Gas, said in a statement that "certainty is key for the US LNG industry, where timelines are years long and investments are worth billions, and these tariffs cause serious uncertainty".
"These tariffs have the power to price US LNG out of the Chinese market, the second-largest LNG importer in the world.
"Tariffs will also make long-term contracts more difficult to negotiate," he said.
US LNG exports to China, almost nonexistent less than two years ago, had gradually increased and accounted for about 10 percent of China's total imports of the fuel by January.
Contrary to a steady increase in export volumes as originally expected before the trade conflict, that rate dropped to about 3 percent in July, according to Sanford C. Bernstein & Co, an investment research firm.