China has published a long list of American products that will be subject to a 25% tariff, including soybeans, dairy products, cars, oil, and propane. But liquefied natural gas (LNG) was absent, apparently deliberately.
“LNG seems to be clearly excluded from the list of goods that will face tariffs,” analyst Nicholas Browne, head of Asia-Pacific gas and LNG for Wood Mac, told Reuters, adding that “LNG is clearly seen as an essential good by the Chinese government. Given this, in the event of an escalation, LNG is likely to remain outside the bounds of any additional tariffs.”
Newly-built American LNG plants will account for a third of the growth in global LNG supply next year and nearly half of the new supply in 2019, and China is becoming a significant consumer of American gas.
Browne noted that the introduction of tariffs would have posed a significant challenge for Chinese buyers as they seek to meet surging demand growth. Chinese gas consumers ran into shortages last winter as Beijing attempted to accelerate the shift away from coal.