Cold Shoulder: China Pauses LNG Shipments from U.S Due to Tariff Retaliation Moves

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--As China has retaliated to U.S. tariffs on Chinese imports by placing tariffs on liquefied natural gas (LNG) from the U.S., Chinese traders have stopped buying from the U.S. for more than 40 days. This is the longest pause in two years, according to Bloomberg, which cited data from analytics firm Kpler indicating that no U.S. shipments were in route to China.

U.S. tariffs on imports from China, including Hong Kong, began at 10% on February 4, and doubled to 20% on March 4. In response, China on February 10 imposed a 15% tariff on U.S. LNG imports. Due to that tariff, Chinese firms with contracts to buy U.S. LNG began diverting those shipments to Europe, according to traders.

Natural gas markets do not seem worried; as of mid-morning Wednesday, Henry Hub prices were up almost 3%, rising 12 cents to 4.17 per million British thermal units (MMBtu). Since LNG under contract to Chinese traders is just being diverted to Europe, not stopped, the actual amount of U.S. exports may not change significantly.

As a point of reference, U.S. Energy Information Administration (EIA) figures show U.S. LNG exports to China in 2023 totaled 173,247 million cubic feet (MCF), with 213,045 MCF going to China in 2024. In 2024, China was eighth on the list of countries receiving U.S. LNG shipments by vessel, the EIA said. The Netherlands topped the 2024 list with 463,779 MCF, followed in order by France, Japan, South Korea, India, the U.K. and Turkey.

Click on the image at right for an IIR Energy chart showing U.S. LNG exports to China and the rest of the world.

U.S. LNG exports to China began in the second half of 2016, after Congress had in late 2015 repealed the OPEC embargo-era ban on exports of crude oil and natural gas. The previous Trump administration had halted LNG to China, with none heading that way between March of 2019 and February of 2020. After that, there were some months with no shipments to China, including June 2020, and January and May of 2022.

The U.S. currently accounts for about 6% of China's LNG imports, and the latter was already looking to source more natural gas from closer to home. Earlier this week, China Resources Gas International had signed an agreement for a 15-year LNG purchase agreement from Woodside Energy Group Ltd. (Perth, Australia), to start in 2027. As trade relations between Australia and China begin to thaw, this is the first long-term supply agreement in that process. It could be a harbinger of a greater shift in China's LNG import sources.

In contrast, Industrial Info News has reported that Europe is now the primary target for LNG exports, saying, "Reuters cites data from LSEG (London Stock Exchange Group) showing that 7.25 million metric tons (86%) of U.S. LNG exports went to Europe in January 2025, followed by 8.82 million metric tons (82%) in February." For more on that, see March 18, 2025, article - With LNG Imports from U.S. High, Europe Expands Regasification Infrastructure.

Click on the image at right for a pie chart from IIR Energy showing the percentage of U.S. LNG exports to China and the rest of the world in 2024.

In order to reduce the need for LNG imports in general, China has boosted its own natural gas production, which was up 3.7% in the first two months of this year compared to the same period last year. Coal and renewables are also a growing part of the nation's energy mix, as it pushes a switch to electric vehicles (EVs) for personal use, but it is also changing commercial vehicles to LNG, which may continue to push usage upward.

Earlier this week, U.S. President Donald Trump hinted at a possible U.S. visit "in the not too distant future" from Chinese President Xi Jinping to discuss avenues toward reducing the economic tensions between the two nations. As yet there has been no official response from Beijing. Xi's most recent U.S. visit was in November of 2023, meeting with then-President Joe Biden, also with the goal of lessening tensions between the two nations.

The Wall Street Journal has previously hinted that a meeting could happen in June, a month in which Xi and Trump both have a birthday.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).