Trump to Meet Xi With $8 Billion in Energy Exports on the Line

President Donald Trump will meet with Chinese President Xi Jinping in Beijing this week, with his administration’s primary economic leverage weakened by legal defeats at home and geopolitical pressures abroad from the war in Iran.

The two-day summit, scheduled for May 14-15, comes as federal courts increasingly rule against the sweeping tariffs Mr. Trump has used to prosecute his trade agenda. “Section 301 tariffs involve a more cumbersome investigatory process before they can be imposed,” said Phillip Magness, a senior fellow at the Independent Institute, noting why the administration previously preferred other statutes.

At stake is a trade relationship that saw China import $8.4 billion worth of U.S. oil and liquefied natural gas in 2024, a figure that has since plummeted to nearly zero under retaliatory tariffs. China imposed a 25 percent tariff on U.S. LNG and a 20 percent tariff on crude oil in 2025, effectively halting the trade.

For investors, the meeting’s outcome could determine the viability of billions in future energy sales and signal whether the White House will double down on a tariff strategy facing mounting legal and procedural obstacles. A failure to secure a deal could see the administration pivot to the more restrictive Section 301 of U.S. trade law, likely triggering a new wave of court challenges.

A Potential Lifeline for U.S. Energy

A deal between Trump and Xi could revive a once-burgeoning energy trade. Chinese imports of U.S. oil peaked at about 395,000 barrels per day in 2020 following the Phase 1 trade deal but have ceased entirely since May 2025. Similarly, U.S. LNG sales to China fell from a high of 8.98 million metric tons to just 26,000 tons in 2025.

Analysts estimate U.S. LNG would be cheaper than Asian spot cargoes if Beijing removed its 25 percent tariff, though sluggish domestic demand in China may limit the upside. Rystad Energy estimates around 12 million tons of U.S. LNG are contracted for delivery to Chinese buyers this year, but those cargoes are being resold to Europe to avoid the steep import duties.

Other energy products have proven more resilient. The U.S. remains China’s sole supplier of ethane and its largest supplier of propane, with 2025 exports valued at $2.96 billion and over $6.6 billion, respectively. These shipments have continued despite the trade war, with Beijing even waiving some retaliatory tariffs to secure supply.

Tariff Strategy Under Fire

The summit’s backdrop is a dramatically altered geopolitical and legal landscape. President Trump arrives in Beijing as the legal foundation for his tariff strategy, based on Section 122 of the Trade Act of 1974, erodes under judicial scrutiny. Hundreds of companies, from Costco Wholesale Corp. to Ford Motor Co., have challenged the levies in court.

This has forced the administration to consider using Section 301 of the same act, a path analysts warn is more complex and legally onerous. “Trump will attempt to stretch the language of Section 301 as well, in which case there will probably be court challenges to some of his weaker Section 301 findings,” Magness said.

Compounding the issue is the ongoing conflict with Iran, one of China’s key allies in the Middle East. The war has redirected U.S. military resources away from Asia and strained munitions stockpiles, leading some Chinese analysts to question Washington’s capacity to defend Taiwan in a potential regional conflict. This altered power dynamic leaves the White House with dwindling leverage as it enters the high-stakes talks.

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