US and China Discuss Removing Tariffs on American LNG Shipments

The United States and China are discussing a plan to reduce or eliminate tariffs on U.S. liquefied natural gas (LNG) as part of broader trade negotiations, according to two people briefed on the matter. The talks are taking place ahead of a planned visit to Washington by Chinese President Xi Jinping next week for a meeting with President Donald Trump on September 24.

Details of the Proposal

The potential removal of the LNG tariff is reportedly part of a larger framework that would see each country cut duties on approximately $30 billion worth of goods. These discussions aim to stabilize trade relations but are not yet final, the sources said. The White House and the Chinese embassy in Washington did not respond to requests for comment.

China imposed a 15% tariff on U.S. LNG in February 2025, which effectively halted a once-booming trade relationship. U.S. government data shows that after the tariff was imposed, shipments to China fell from 64 vessels in 2024 to virtually zero in 2025.

Market Implications

For the U.S. energy sector, reopening the Chinese market would provide a crucial destination for a massive wave of new export capacity. The U.S. is the world's largest LNG exporter, and China is the world's largest importer.

American LNG export capacity is projected to expand by roughly 10 billion cubic feet per day through 2027. Major projects contributing to this growth involve companies such as:

Ad

• Cheniere Energy
• Venture Global
• Sempra
• NextDecade
• Exxon Mobil

A deal could help secure long-term customers for this new supply, as an estimated 24.5 million metric tons of capacity currently under construction in the U.S. remains uncontracted, according to industry analysis.

Global Context

The potential thaw in U.S.-China energy trade comes as global LNG flows are being reshaped by geopolitical events. Following Russia's 2022 invasion of Ukraine, many U.S. cargoes were redirected to Europe. More recently, conflict in the Middle East has intensified competition for LNG supplies in Asia.

Despite the existing tariff, shipping data from LSEG has shown several U.S. LNG cargoes have recently arrived in China or are en route, suggesting some buyers have begun to return to the American market in anticipation of a potential policy shift.