According to Reuters, China has omitted LNG from its list of US products set to be hit with heavy import duties.
Many are viewing this action as holding a potential weapon in reserve, to be brought to the foreground at a later date should the trade war with Washington escalate.
A Chinese state oil and gas company executive stated: “If the (trade) war escalates, (I expect) the government will not hesitate to add LNG.”
This move also emphasises China’s ongoing desire to safeguard supplies of gas as it continues to push its ‘war on pollution’ agenda with the aim of switching millions of households and businesses away from using coal.
Indeed, China has been increasingly keen on US LNG imports and Morgan Stanley has estimated that such annual imports of LNG could rise to as much as US$9 billion within two or three years (in 2017 imports stood at US$1 billion). This figure could be even greater should a logistics bottleneck be resolved on the US side of the equation.
This would go a long way to helping balance China’s trade surplus with the US; currently a major point of irritation for Washington in the trade dispute. However, this strategy truly does offer Beijing yet another weapon to utilise if relations decline further.
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