China has imposed retaliatory tariffs on U.S. goods following new U.S. tariffs on Chinese imports. China’s LNG imports have been a focal point of global energy dynamics, particularly as the country has emerged as the world’s largest importer of liquefied natural gas. The increase in LNG imports is part of China’s broader strategy to enhance energy security by reducing reliance on coal and ensuring diverse energy sources, which also includes expanding domestic production and pipeline imports.
China announced a 15% tariff on U.S. coal and liquefied natural gas (LNG), and a 10% tariff on crude oil, agricultural machinery, and large-displacement cars. These counter-tariffs were a direct response to the U.S. imposing a 10% tariff on all Chinese imports into the U.S., which went into effect on February 4, 2025. Alongside the tariffs, China has launched an antitrust investigation into Google, suggesting a broader retaliatory strategy. They’ve also announced export controls on critical minerals like tungsten, tellurium, ruthenium, molybdenum, and ruthenium-related items.
China has seen significant growth in LNG imports, driven by industrial decarbonization efforts, economic recovery, and a policy push towards reducing coal usage. In 2023, China overtook Japan to become the largest LNG importer globally, with imports reaching 71.32 million tons, a 12.6% increase from the previous year. The country has been rapidly expanding its gas infrastructure, including LNG receiving terminals, to accommodate the growing demand. It’s projected that China will add significant regasification capacity, enhancing its capability to import and store LNG.
Total natural gas imports for 2024 highest since at least 2013. Shipments of liquefied natural gas to China, the world’s largest buyer of the chilled fuel, rose to a three-year high in 2024 but defied predictions that imports could reach a new record. China’s LNG imports rose 7.7% to 76.65 million tons, according to the General Administration of Customs. That missed forecasts for > 80 million tons, which would have topped the current record of 78.89 million tons in 2021. Total natural gas imports, which also include pipeline supply, rose 9.9% to 131.69 million tons, the highest since at least 2013.
China has been diversifying its LNG sources, with significant long-term contracts signed with several countries. The U.S. has become a notable supplier, despite geopolitical tensions, with Chinese companies signing long-term deals to secure supply. Australia remains a major supplier, but China also has contracts with Qatar, Malaysia, and others to ensure a stable supply. Through its large-scale long-term contracts, China is not only securing its energy needs but also positioning itself as a significant player in the global LNG market, capable of influencing prices and supply dynamics.
The market saw a tight supply situation due to various constraints, including geopolitical issues like the pause on non-FTA LNG export approvals in the U.S. by the Biden administration, which could impact over 70 MTPA of new capacity, and sanctions on Russian LNG affecting nearly 20 MTPA of expected capacity.
The U.S. remained a leading exporter, with its LNG exports forecasted to continue growing with the startup of new projects like Plaquemines LNG Phase I, Corpus Christi Stage 3, and the Golden Pass LNG facility. North America’s LNG export capacity was on track to more than double by 2028, with a significant increase from 2024 to 2028.
Despite lower prices compared to previous years, the market remained fragile with factors like annual maintenance of export facilities, potential disruptions from geopolitical events, and the aging of existing liquefaction infrastructure posing risks.
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