US, China Discuss Cutting LNG Tariffs Ahead of Xi Visit
· fitness
Tariffs on US LNG: A Trade Deal that’s Long Overdue
The discussions between the US and China about cutting tariffs on American liquefied natural gas (LNG) are a welcome development. They come as a reminder of how far behind we’ve fallen in terms of trade relations with our largest trading partner.
A crucial step towards reviving this trade relationship is potential relief for US LNG producers, who would gain another major destination for their gas amidst geopolitical upheaval reshaping global energy flows. With new and expanded facilities coming online, export capacity is set to grow by roughly 10 billion cubic feet per day through 2027. Notable projects include those involving Cheniere Energy, Venture Global, Sempra, NextDecade, and Exxon Mobil.
The impact of the tariff on US LNG exports has been dramatic. Shipments to China fell from a record 131 vessels in 2021 to effectively zero in 2025 after Beijing imposed the 15 percent tariff. Even with the tariff still in place, several US cargoes have recently arrived or are en route to China, according to LSEG shipping data.
The fact that American LNG producers are seeking new markets is a direct result of years of trade tensions with China making one of the world’s biggest LNG markets less accessible. The ongoing conflict in the Middle East and Russia’s invasion of Ukraine have created shifts in global energy flows, increasing competition for LNG cargoes in Asia.
Of the almost 100 million metric tonnes of LNG capacity under construction in the US, 24.5 million metric tonnes remain uncontracted to long-term customers. This is a significant risk for projects seeking financing and long-term customers.
The discussions between the two countries are part of efforts to stabilise trade ties ahead of a September 24 meeting between President Trump and Xi. While neither side has commented on the matter, the fact that they’re discussing this is progress. The US LNG industry needs certainty and consistency in its relationships with major trading partners like China.
In recent years, we’ve seen how quickly trade disputes can escalate into full-blown crises. Remember 2019? Trump’s first-term trade dispute with Beijing led to a sharp drop in US LNG shipments to China. But after that initial confrontation, the relationship rebounded sharply, and by 2021, we saw record exports.
This isn’t just about economic incentives; it’s also about global energy security. The US is the world’s largest LNG exporter, and China is its biggest importer. Restoring this trade relationship will help stabilise global energy flows, which are already being reshaped by geopolitics.
Reader Views
- TGThe Gym Desk · editorial
"It's surprising that the US and China are finally discussing tariff cuts on American LNG just as Xi's visit looms. But what's missing from this narrative is the reality of just how costly these trade tensions have been for US producers. The uncontracted 24.5 million metric tonnes of capacity under construction in the US poses a significant risk to project financing, and until these tariffs are resolved, those risks won't subside."
- CTCoach Tara M. · strength coach
While cutting LNG tariffs is a step in the right direction, we shouldn't overlook the elephant in the room: infrastructure constraints. The surge in US LNG exports will be severely limited by pipeline capacity bottlenecks and inadequate port facilities. Without addressing these underlying issues, even lower tariffs won't unlock the full potential of this trade deal. We need to talk about upgrading our export infrastructure if we want to make the most of this opportunity.
- DRDevon R. · former athlete
This tariff cut is long overdue, but let's not get too ahead of ourselves. While opening up China's vast market for US LNG would be a significant boon, we need to consider the elephant in the room: oversupply. With 24.5 million metric tonnes of uncontracted capacity coming online, will these new customers be enough to soak it up? Or are we just kicking the can down the road, inviting another supply glut that could drive prices back down again? We should be cautious about getting caught up in the excitement of a potential deal and instead focus on building sustainable long-term contracts.