China announces 25% retaliatory tariff on US LNG, timing yet to be set

HOUSTON (ICIS)–The Chinese commerce ministry has announced retaliatory tariffs on US goods, including LNG, which will be subject to a 25% tariff, the agency said on 3 August.

The timing of the tariffs will be announced at a later date.

The Chinese ministry’s said it was responding to the 10 July decision by the US government to impose tariffs of 10% on Chinese goods, as well as the further announcement this week by US trade representative Robert Lighthizer on an additional set of tariffs being considered.

The ministry said the US was violating the rules and obligations of the World Trade Organization and threatening China’s economic interests and security.

On 1 August, Lighthizer said that in addition to the tariffs announced in July, another level of tariffs between 10% and 25% could be considered. The 25% duty would be applied on the list of products previously announced in July.

The announcement on 3 August by China has now escalated tensions between the US and China, as US LNG exports are now ramping up to become a global supplier.

According to LNG Edge, the US exported 1.8mtpa of LNG to China from January through July 2018. This was up 19% from all of the 2017 exports from the US to China. Currently, Cheniere’s Sabine Pass plant in Louisiana and the Dominion-operated Cove Point in Maryland are operating in the US.

The next plants to come online in the US in the next two years are Kinder Morgan’s small-scale Elba Island LNG in Georgia, Cheniere’s second project, Corpus Christi LNG in south Texas, Freeport LNG in Texas and Cameron LNG in Louisiana.