2025-04-18T08:46:34.000Z

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Beijing, China - In a significant development affecting international energy trade, China has officially suspended all imports of liquefied natural gas (LNG) from the United States for more than ten weeks. This dramatic step comes in response to newly imposed tariffs that have rendered American natural gas economically unviable within the Chinese market.

According to shipping data reported by the Financial Times, the last recorded shipment of LNG from the United Statesa substantial 69,000-tonne tanker departing from Corpus Christi, Texasarrived in Chinas Fujian province on February 6. Moreover, a second shipment that was bound for China was unexpectedly diverted to Bangladesh after it failed to dock before a hefty 15% tariff took effect on February 10. In a subsequent development, this tariff was escalated to a staggering 49%, effectively pricing US LNG out of the competitive Chinese market.

Anne-Sophie Corbeau, an expert at Columbia Universitys Centre on Global Energy Policy, commented on the long-term implications of this trade freeze. There will be long-term consequences, she warned, stating, I do not think Chinese LNG importers will ever contract any new US LNG again. This current freeze is reminiscent of a similar halt that occurred during the first term of former US President Donald Trump, which lasted over a year. Analysts express concern that the renewed suspension could jeopardize the viability of major LNG infrastructure projects in both the US and Mexico, particularly those that depend on Chinese investments and long-term contracts.

The growing trade rift has prompted China to intensify its pivot towards energy sources from Russia. Zhang Hanhui, Chinas ambassador to Russia, noted, I know for sure that there are a lot of buyers. So many buyers are asking the embassy to help establish contacts with Russian suppliers. As a result, Russia has now emerged as Chinas third-largest supplier of LNG, following Australia and Qatar. Furthermore, discussions are ongoing regarding the Power of Siberia 2 pipeline, which is expected to deepen this burgeoning energy alliance.

In the wake of Russias invasion of Ukraine, Chinese importers have begun reselling US LNG cargoes to markets in Europe, where they have found more attractive pricing. Notably, the share of US LNG in China's overall imports has plummeted, comprising just 6% in 2024 compared to 11% in 2021.

Gillian Boccara, an analyst at Kpler, expressed a bleak short-term outlook for the resumption of LNG trade between the two nations. The last time this happened, there was a complete hiatus until the Chinese authorities granted waivers to companies, but that was at a time when gas demand was booming. Now, we are looking at lower economic growth, and we think the Chinese can withstand the loss of these cargoes for quite a long time, she explained.

Additionally, Richard Bronze from Energy Aspects anticipates a reshuffle in global trade flows as a result of these tariffs being elevated to an effective embargo level. With tariffs rising to the level where they are an effective embargo, we will see a reshuffling of trade flows, he stated, adding, We also expect Asia's demand to fall by 510 million tonnes overall. That should bring gas prices down a bit in Europe.