Chinese tariffs on LNG, oil aim at U.S. energy dominance agenda

Chinese tariffs on LNG, oil aim at U.S. energy dominance agenda

Andrew Cummings
August 4, 2018

China is trying to seek an "equal" position in future talks with the USA with today's retaliation announcement, said Gai Xinzhe, analyst at the Bank of China's Institute of International Finance in Beijing.

China has now either imposed or proposed tariffs on $110 billion of USA goods, representing the vast majority of China's annual imports of American products.

In a message to the White House, China's finance ministry said exactly when the tariffs would come into force would depend on Washington's response.

The minister added: "China has to take necessary countermeasures to defend its dignity and the interests of its people".

"They better not underestimate President Trump's determination to follow through on our asks".

The list includes products as varied as snow blowers and 3-D printers, suggesting Chinese authorities were struggling to find enough imports that wouldn't disrupt their own economy.

But Mr. Trump raised the stakes this week by asking the U.S. Trade Representative to consider increasing the proposed tariffs on the $200 billion worth of goods to 25%.

By comparison, companies in America sold £100bn ($130bn) of goods to China during the same period. Washington is expected to soon implement tariffs on an additional $16 billion of Chinese goods, which China has already announced it will match immediately.

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's technology development tactics hurt American companies.

It also said that the date of implementation of the taxes will depend on actions taken by the U.S., while adding that consultation on the basis of mutual respect, equality and mutual benefit is an effective way to resolve trade differences.

Trump has said he is determined to reduce the large US trade deficit with China.

However, speaking to reporters at the White House, Kudlow said there had been some communication on trade "at the highest level" in recent days.

Morgan Stanley has estimated annual Chinese imports of U.S. LNG could rise to as much as $9 billion within two or three years, from $1 billion in 2017.

In an editorial on Wednesday, the state-run China Daily called the US' move "gangsterism", and said it showed the U.S. had no qualms about squeezing as much as it could from trade partners.

China's biggest USA imports by value in 2017 were aircraft and related equipment, soybeans and autos.

China would likely hike purchases from Saudi Arabia, Russia, the United Arab Emirates and Iraq if the tariffs slowed USA flows, said Neil Atkinson, head of the oil industry and markets division at the International Energy Agency.

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