China and the United States are negotiating to reduce or eliminate the 15% tariffs on U.S. liquefied natural gas (LNG). These negotiations are part of a broader package of energy and agricultural agreements that may be announced during Chinese President Xi Jinping's visit to Washington on September 24.
History of tariffs and impact on LNG trade
In February 2025, China imposed a 15% tariff on U.S. LNG in retaliation for tariffs imposed by former U.S. President Donald Trump on Chinese goods. This action effectively halted LNG trade between the two countries, with the last significant shipments sent to China earlier that year.
Read more: Energy management in South Pars with efficiency projects and solar power plant
U.S. LNG producers are seeking new markets to absorb their developing export capacity, as years of trade tensions with China have made one of the world's largest LNG markets less accessible. The ongoing negotiations relate to efforts to stabilize trade relations between the two countries ahead of the meeting between the U.S. President and the Chinese President and are not yet finalized.
Expansion of the LNG industry and global impacts
The U.S. LNG industry is entering a major expansion phase, with an expected increase in export capacity of about 10 billion cubic feet per day by 2027. Projects involving Cheniere Energy, Venture Global, and Exxon Mobil are increasing their capacities. The return of Chinese buyers could provide a new destination for American producers, especially as geopolitical developments are changing global energy flows.
Of nearly 100 million tons of LNG capacity under construction in the U.S., 24.5 million tons have not yet been contracted to long-term customers. Following Russia's invasion of Ukraine in 2022, U.S. LNG shipments that might have gone to Asia were redirected to Europe. Meanwhile, ongoing conflicts in the Middle East between the U.S. and Iran have created another shift in global energy flows and increased competition for LNG shipments in Asia.
Read more: Mahiar Ramadan Khani: The exchange rate should be kept below 230,000 tomans · Wang Yi: China firmly supports Iran's sovereignty and national dignity
