admin President Donald Trump better be as good of a negotiator as he claims. U.S. oil and natural gas producers – and American consumers – have a lot riding on President Trump’s unorthodox approach to foreign affairs and trade.
The president may yet come out on top in trade spats with China, Saudi Arabia, the European Union, and our NAFTA neighbors, but nervous traders looking at the scoreboard today are seeing plenty of signals for higher energy prices.
President Trump speaks often about the importance of putting “America first” and “energy dominance” but his administration’s policies don’t always appear to support those goals. The unintended consequence of the Trump administration’s get-tough-on-trade stance includes cutting off access to the growing Chinese market and ceding control over global oil markets to OPEC, and especially, Saudi Arabia.
Beijing on Friday added liquefied natural gas (LNG) to the list of U.S. goods on which it intends to levy import duties, pulling a growing American business sector into the escalating trade war with Trump. LNG exports would face a 25% tariff that would make American gas noncompetitive in the Chinese market. China was the third biggest market for U.S. LNG in 2017, after South Korea and Mexico. China has become the world’s fastest-growing LNG market after imports surged by nearly 50% last year to nearly 40 million tons.
That growth is expected to continue as China tries to lower its chronic air pollution and switch from coal-fired power production to natural gas. U.S. LNG exports were expected to escape tariffs given China’s growing energy appetite, but no.
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