US-China LNG Deal Hopes Sparked as Tariff Talks Intensify

The US and China are discussing a package to lower tariffs on $30 billion of each side's exports, including liquefied natural gas (LNG). This comes ahead of a key summit between leaders from both countries. A 20-year deal signed by China Gas Holdings with Venture Global for 500,000 metric tons of LNG per year has sparked hopes that a tariff breakthrough is near.

The $6 billion trade in US LNG to China was worth $6.2 billion at its peak in 2021 but plummeted to zero in 2025 due to Beijing's 15% tariff on American gas. However, the new deal does not commit Chinese buyers to import a single cargo under the current tariff regime.

The contract with Venture Global is for deliveries starting in 2030, giving China four years to remove or renegotiate the tariff. Meanwhile, US companies have been struggling to find long-term buyers for their Gulf Coast LNG capacity, with an estimated 24.5 million tonnes per year of capacity now under construction having no committed buyers.

China's LNG demand has also been declining due to a shift towards piped gas and renewables, with forecasters predicting a drop in demand by 14-22 million tons for the early 2030s.