Trade war cuts U.S. liquefied natural gas exports to China
No liquefied natural gas (LNG) vessels that left the United States in March and April have gone to China, Refinitiv Eikon shipping data shows, as the trade war between the two nations escalates.
On Friday, the United States increased its tariffs on $200 billion in Chinese goods to 25% from 10%, rattling financial markets already worried the 10-month trade war between the world’s two largest economies could spiral out of control.
So far this year, only two vessels have gone from the United States to China - one in January and one in February - versus 14 during the first four months of 2018 before the start of the trade war.
The data, however, shows a handful of vessels from the United States are still sailing across the Pacific Ocean and some could end up in China.
In 2018, 27 LNG vessels went from the United States to China, down from 30 in 2017. Most of those, however, left U.S. ports before the trade war started, with 18 tankers going to China in the first half of the year and just nine during the second half.
Executives at Cheniere Energy Inc, which owns two of the three big operating U.S. LNG export terminals, said this week that the trade war is “unproductive and creates some added costs for our Chinese consumers” but “hasn’t had an impact on us” and is not expected to have an impact going forward.
The United States and China started imposing tariffs on each other’s goods in July 2018. As the dispute heated up, China added LNG to its list of proposed tariffs in August and imposed a 10-percent tariff on LNG in September.
The United States is the fastest-growing LNG exporter in the world, while China is the fastest-growing importer of the fuel.
U.S. LNG sales jumped 61 percent in 2018 versus 2017, making the country the fourth-biggest exporter in the world, while China, the world’s second-biggest buyer of the fuel, increased its purchases by 39 percent last year as it weans its power and industrial sectors off coal to reduce pollution, according to data from the International Gas Union.
Reporting by Scott DiSavino Editing by Bill Rigby
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