China May Cut 25% Tariff on US LNG in Xi-Trump Summit

Elena Fischer

·May 12 2026, 06:35

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Key Takeaways:

A US-China energy deal may be reached at the May 13 presidential summit.
China could remove its 25 percent tariff on US liquefied natural gas.
The agreement would lower costs for PetroChina and CNOOC, boosting US exports.

A potential US-China trade deal could revive American liquefied natural gas exports to the world’s second-largest economy, with officials suggesting a 25 percent tariff on the fuel may be removed following a summit between Presidents Xi Jinping and Donald Trump on May 13.

The discussions, set to take place in Beijing, come after a collapse in energy trade between the two nations. "China may consider reaching an agreement to purchase more US energy," US officials indicated, according to a Reuters report.

Chinese imports of US LNG plummeted from 4.15 million tonnes in 2024 to just 26,000 tonnes last year after the trade war began. The sharp decline forced Chinese buyers with long-term US contracts, such as PetroChina (00857.HK) and CNOOC (00883.HK), to resell cargoes to Europe to avoid the steep import duties. Analysts estimate that removing the tariff would make US LNG cheaper for Chinese buyers than spot cargoes in Asia, especially considering market volatility triggered by the Iran war.

A new agreement could provide a significant lift for US energy producers by reopening a critical market. For China, it would offer a more affordable energy source as it navigates global price fluctuations. However, with China’s LNG demand expected to remain weak for a second consecutive year, any immediate increase in import volumes may be limited.

This article is for informational purposes only and does not constitute investment advice.