China Slaps Retaliatory Tariffs on U.S. Crude and LNG

China Slaps Retaliatory Tariffs on U.S. Crude and LNG | OilPrice.com

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Breaking News:

ByIrina Slav– Feb 04, 2025, 3:50 AM CST

China has struck back at Trump’s latest tariffs on Chinese imports into the United States, announcing today a 15% levy on imports of U.S. liquefied natural gas and coal, and a 10% tariff on crude oil.

Beijing also introduced export limits on more critical minerals, including tungsten, molybdenum, tellurium, ruthenium, and ruthenium-related elements in a bid to “safeguard national security interests,” Reuters reported. Tariffs will be introduced on farm equipment imports from the United States as well as some cars.

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“The trade war is in the early stages so the likelihood of further tariffs is high,” Oxford Economics said in comments on Beijing’s latest retaliatory move.

President Trump announced he would be imposing import tariffs on all Mexican and Canadian imports into the United States and adding a 10% levy on Chinese imports before he took office, justifying the move with trade deficits the U.S. was running with its biggest trade partners.

Trump reduced the rate for Canadian crude oil to 10% and on Monday announced a 30-day delay to the tariffs on Mexico and Canada taking effect amid urgent negotiations with the heads of the two states as they sought to clinch a new trade deal with Washington. There was no mention of such negotiations with China, however, and the 10% additional tariffs went into effect today.

The tariffs on LNG could see a change in flows of the superchilled fuel into China in a reversal of earlier plans to boost these imports, as forecast by Bloomberg Intelligence last month. At the time, the outlet predicted that Trump’s approach to fixing U.S. trade deficits with the country’s biggest trading partners would benefit LNG exporters to Asia, giving them a bigger share of that market.

According to Bloomberg Intelligence, Chinese gas traders have committed to buying a total of 14 million tons from U.S. producers beginning in 2026. This is 50% more than China’s previous record of U.S. LNG purchases, set back in 2021. Now, these flows may be in jeopardy unless the tariff exchange stops.

By Irina Slav for Oilprice.com

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