As the US-China trade war intensifies, energy markets are entering a new phase of instability. Reciprocal tariffs—now extended to include liquefied natural gas (LNG)—are forcing Chinese energy firms to consider revising or suspending long-term contracts with American suppliers.
According to S&P Global, LNG shipments from the United States to China came to a halt on February 10, after Beijing retaliated against Washington’s 10% tariff on Chinese goods by imposing a 15% duty on LNG, which was later raised to a staggering 140%.
Energy Contracts Under Pressure
In recent years, China has signed 21 long-term LNG procurement agreements with US producers, covering a total volume of 25.6 million tonnes per year. Now, analysts warn that the current trade environment may force Chinese buyers to renegotiate—or even abandon—these contracts.
“During the previous trade war of 2018–2019, tariffs on US LNG lasted for 18 months,” said Li Lunjia, Principal Analyst at S&P Global, during a webinar. “We’re likely to see a similar suspension of imports and new contract activity for as long as these tariffs remain in place.”
From Technology to Energy: A Broader Trade Conflict
A separate report by UBS notes that the trade war is no longer confined to the tech sector. While earlier rounds of tariffs focused on smartphones, semiconductors, and computing equipment, the latest escalation marks a turning point—bringing energy, particularly LNG, into the center of geopolitical friction.
“With tariffs now reaching 145% and 125% respectively, bilateral trade is under serious threat,” the report says. “Companies are already shifting their logistics—using third-country routing and selective exemptions—to navigate the storm.”
China’s Energy Security Put to the Test
The disruption of US LNG imports is not just an economic issue—it is a test of China’s long-term energy security strategy. With American gas out of the picture, Beijing must now rely more heavily on alternative suppliers such as Qatar, Australia, and Russia to meet its growing demand.
Given that the US has rapidly emerged as one of the world’s top LNG exporters, losing access to this source could fuel global competition and increase price volatility.
Is LNG the New Geopolitical Weapon?
Experts argue that LNG—like advanced technology—is fast becoming a geopolitical lever. The United States appears to be using energy access as a tool to curb China’s strategic expansion, with implications that could reshape global energy flows for years to come.
As the next round of US-China talks looms amid growing uncertainty, LNG has become one of the most sensitive and strategic elements of the trade conflict. The fate of energy contracts between the world’s two largest economies may carry lasting consequences not just for bilateral relations—but for global energy security at large.
