US-China LNG tariff talks face weaker demand and rival supplies

Washington and Beijing are discussing tariff reductions that could reopen direct US liquefied natural gas trade with China, but weaker demand forecasts and competing suppliers complicate the outlook, OilPrice.com reported. The talks concern roughly $30 billion of exports from each country, including LNG, ahead of a September 24 summit. China’s 15% tariff on American LNG remains in place.

China Gas Holdings signed a 20-year agreement with Venture Global on September 14 to buy 500,000 tonnes annually from 2030. OilPrice.com said Washington viewed the contract as a sign of progress towards tariff relief, although the agreement contains no tariff provisions. Its delayed start allows time for policy changes and does not oblige the buyer to bring cargoes into China under the current tariff arrangements.

Existing contracts have remained in force despite the disruption to direct shipments. Chinese buyers have instead resold American cargoes into Europe and elsewhere in Asia, according to the report. Citing Forbes, OilPrice.com said Chinese companies already held nearly 25 million tonnes a year of US LNG offtake under contracts lasting 20 to 25 years. The new China Gas purchase is small beside those commitments and represents well below 1% of China’s 2025 LNG imports.

China has also drawn on alternative suppliers. Banchero Costa figures cited by OilPrice.com put Australia’s share of Chinese LNG imports from January to July at 36%, Southeast Asia’s at 20%, Russia’s at 12% and Canada’s at 4%. US cargoes accounted for 0.2%. The report said China increased purchases from other sources after Iranian missile strikes removed about 17% of Qatar’s LNG export capacity in March.

Demand presents another constraint. China imported 68.43 million tonnes of LNG in 2025, a three-year low. OilPrice.com cited Reuters as attributing the decline to greater use of pipeline gas and renewables, while S&P Global, Wood Mackenzie and JPMorgan have reduced their early-2030s demand forecasts by 14 million to 22 million tonnes. The report also cited a Reuters estimate that 24.5 million tonnes a year of Gulf Coast LNG capacity under construction lacked long-term buyers. Any tariff agreement would therefore restore access to a changed market: the frequently cited $6.2 billion value of US LNG sales to China dates from 2021, rather than current trade.