China’s LNG tariff threatens Trump energy export goal

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China’s move to increase tariffs on $60bn in US goods targets a commodity central to the Trump administration’s goal of exporting more energy: liquefied natural gas.

Trade in gas condensed for shipment on ocean vessels has boomed in the past five years, reaching a record 316.5m tonnes in 2018, according to the International Gas Union.

China has become the world’s second-biggest LNG importer as it seeks a cleaner alternative to coal to generate electricity, according to Financial Times.

Liquefaction plants sponsored by energy majors such as ExxonMobil and independent companies such as Cheniere Energy promise to make the US an important LNG exporter, following its ascent as the premier natural gas supplier after shale drilling transformed its production.

China’s 25 per cent tariff on US gas has jolted that trajectory. The duty, announced this week in retaliation for added tariffs from the White House, is a rise from an earlier 10 per cent levy that China imposed last September. It is due to take effect on June 1.

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