US-China Trade Tensions Ease as LNG Exports Get Boost

Chinese leader Xi Jinping's upcoming visit to Washington may see a boost in US natural gas exports to China, a move that could bring in over $6 billion annually. The trade relationship between the two countries has been strained since February 2025, when President Donald Trump began imposing tariffs on Chinese energy imports, including liquefied natural gas (LNG). Chinese companies have been reselling LNG shipments to European and Asian buyers rather than paying the 15% levy imposed by the US.

The prospect of a deal to scrap the tariff and revive trade in LNG could be a win for both sides. For Beijing, it would provide a relatively minor concession that is useful given current energy constraints around the Persian Gulf and disruptions from Qatar. The Trump administration sees this as an eye-catching number, with long-term contracts spanning decades, at a time when US producers are expanding.

LNG has been a key component of every Trump trade deal with China, including those in 2017 and 2020's Phase One agreement. Chinese companies such as China Gas Holdings Ltd have already begun positioning themselves for a change, with the latter agreeing to buy US LNG for 20 years starting in 2030.