SMM News: the Chinese government has officially announced the implementation of a 25 per cent tariff on liquefied natural gas (LNG) in the United States.
On May 13, the tariff Commission of the State Council issued an announcement that the tariff rate on the list of goods on which LNG was placed had been raised to 25 percent from the previous 10 percent, a counter-measure taken by China after imposing tariffs on the United States.
On May 9, the US government announced that with effect from May 10, the tariff rate on US $200 billion listed goods imported from China would be raised from 10 per cent to 25 per cent.
According to the announcement of the tariff Commission of the State Council, with effect from June 1, the tariff rate will be increased to 25, 20 or 10 per cent for some of the US goods on which tariffs have been imposed on the US $60 billion list.
The announcement said that the above measures of the US side have led to the escalation of Sino-US economic and trade frictions, violated the consensus of China and the United States on resolving trade differences through consultation, and damaged the interests of both sides, which is not in line with the general expectations of the international community.
The increase in tariffs on US LNG may lead China to further reduce its imports of US LNG.
According to statistics, so far this year, only two ships of LNG have been exported to China from the United States. The number was 14 in the first four months of 2018, before a trade war between China and the United States broke out.
According to statistics from the General Administration of Customs, in 2017 and 2018, China imported 1.511 million tons and 2.148 million tons of LNG from the United States respectively, worth US $640 million and US $1.095 billion respectively, accounting for about 4 percent of China's total LNG imports in that year. The proportion is not high.
China's largest source of LNG imports is Australia, accounting for about 40 per cent of the total, followed by Qatar, Malaysia and Indonesia, with the latter three accounting for about 40 per cent of the total.
In recent years, because of the characteristics of cleanliness and high efficiency, natural gas has been widely used in power generation and industry, and has become an important substitute for coal. Asian countries are also trying to reduce their dependence on coal, and natural gas consumption is growing rapidly.
Driven by air governance and the transformation of energy structure, China has become an important market for international LNG sales.
China is now the world's second largest importer of LNG, after Japan. According to the General Administration of Customs, China's LNG imports reached 53.78 million tons in 2018, an increase of 41.2 per cent over the same period last year.
At present, the United States is the world's fastest-growing LNG exporter, and its LNG exports in 2019 are expected to be the third largest in the world, behind Qatar and Australia.
Last week, (Cheniere Energy), the largest LNG producer in the United States, said the trade war would not help and would only increase customer purchase costs, but so far, it has not had a real impact on sales.
In a statement on its website, the American Petroleum Institute (API) said that the tariff measures have curbed the prospects for the growth of LNG investment in the United States, hurt the interests of American workers, and will benefit foreign competitors in the United States.
Since July 2018, the United States and China have imposed tariffs on each other's goods. In September last year, China added LNG to its list of tariffs and imposed a 10 per cent tariff on US LNG.