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US and China discuss cutting tariffs for US LNG before Xi's visit

According to two people who have been briefed about the discussions, the US and China are discussing a proposal to reduce or eliminate 'China's tariffs against American LNG. This is part of a broader agreement on energy and agriculture that could be announced if Chinese President Xi Jinping comes to Washington next week.

People said that the?potential?relief of US exports of Liquefied Natural Gas is being discussed along with a larger framework whereby the US and China each would cut tariffs on around $30 billion worth of goods.

In February 2025, China increased its tariffs on US LNG by 15% in response to President Donald Trump's duties against Chinese goods. This effectively ended the US-China LNG trading, and the last significant cargoes arrived early in 2025.

American LNG producers are looking for new markets to absorb the new export capacity that is being built along the US Gulf Coast. Years of trade tensions have made China, one of the largest LNG markets in the world, less accessible.

These?discussions' are part of efforts to stabilise trade ties in advance of a meeting between Trump and Xi on September 24, and they are not finalized, according to the people. The White House nor the Chinese Embassy in Washington did not respond to requests for comments.

The American LNG Industry is entering a phase of major expansion. Export capacity will grow by approximately 10 billion cubic feet a day through 2027, as new and expanded installations ramp up. Projects involving Cheniere Energy Venture Global Sempra NextDecade, Exxon Mobil and Venture Global are among those adding capacity.

Return of Chinese buyers could?give US gas producers another major destination at a time when geopolitical turmoil is reshaping the global energy flow, possibly helping to underpin demand for those projects that are currently under construction or seeking financing and long term customers.

According to estimates and analyses by the industry, of the nearly 100 million metric tonnes of LNG capacity currently under construction in the US 24,5 million metrictons have yet to be contracted to long-term clients.

Global LNG FLOWs

US LNG cargos, which would have otherwise gone to Asia, were increasingly drawn to Europe after Russia's invasion of Ukraine in 2022 disrupted Europe’s access to Russian gas pipelines.

As a result of the ongoing conflict between Iran and the US in the Middle East, global energy flows have shifted, as disruptions in supply are increasing the competition for LNG cargoes from Asia.

China is the largest LNG -importer in the world, and the US the largest LNG-exporter. This gives the two countries a strong economic incentive to reestablish a trade relationship that was growing rapidly?before tariff disputes.

US data shows that after Beijing implemented the tariff on US LNG, US exports to China dropped from 64 vessels to zero in 2025.

In 2021 the number of vessels had "reached a new record", reflecting the rapid expansion of US LNG trade to China since large-scale exports began from the Lower 48 States in 2016.

US LNG shipments from the US to China dropped to only two vessels during Trump's first term trade dispute with Beijing in 2019, before bouncing back in 2020 and 2021.

According to LSEG shipping information, in recent months several US cargoes left the Gulf 'Coast terminals for export have either arrived in China, or are heading there. This suggests that Chinese buyers began to return to the US even though the tariff remained.

According to the Energy Information Administration, US LNG exports in the first half 2026 averaged 17,4 bcf/d, up by 23% compared to a year ago.

(source: Reuters)