The introduction of 10-percent duties on US LNG by China on September 24 have made the super-chilled American fuel uncompetitive for Chinese customers. Besides hitting interests of US LNG producers, China's move may affect Washington's plans to take over the Asian market in the long run.
Forbes contributor Jude Clemente insisted in his September op-ed that "the US must not lose China's liquefied natural gas market." He highlighted that Donald Trump's trade war with Beijing "is throwing a giant monkey wrench" into the US' fast growing LNG industry, threatening the construction of up to 20 LNG terminals around the US.
In addition, on October 3, Reuters reported that US crude oil shipments to China had completely stopped in recent weeks, citing China Merchants Energy Shipping Co (CMES).
Sputnik reached out to Tom McGregor, a Beijing-based political analyst and senior editor for China's national TV broadcaster CCTV, who shared his opinion on the other side of the coin.
"My personal opinion is that Beijing took a huge gamble and unless the US-China trade talks are resolved soon, has placed itself in serious harm," McGregor suggested. "Perhaps, Chinese officials had anticipated by shutting down oil and gas imports from the US that US President Donald J. Trump would start turning wobbly, but they sharply misjudged him."
"Such drastic action by Beijing will only embolden Trump to impose tougher measures against China, since Beijing appears unwilling to compromise for the time being," he warned.
Earlier, on October 14, Trump threatened to impose yet another batch of tariffs on the People's Republic in an interview with CBS' "60 Minutes." As of yet, Washington has imposed additional duties on a total of $250 billion in Chinese products, to which Beijing responded in a tit-for-tat manner.
According to McGregor, Beijing's move may have repercussions for the country, "especially for northern China this winter."
"Beijing has signed on the UN Climate Change Pact and so must adhere to stricter regulations on the environment," he noted. "The UN is forcing Beijing to shut down its coal plants, while green energy will not be sufficient to restore China's energy supply this winter and hereafter. Meanwhile, Trump pulled the US out of the UN Climate Change pact, so he can re-charge the nation's coal sector."
China May Continue to Buy US LNG
The political analyst foresees that "China will end up buying US oil and gas but at a premium, such as from Cheniere Energy, which sells its LNG at the spot market and from my understanding, so contracts can be purchased from a non-Chinese buyer, but sold at a higher price to China."
"Besides, if there's a problem for the US, we can take a closer look at the trends of oil and gas prices in recent weeks by reviewing the WTI NYMEX Price Chart in the past few months," the CCTV commentator noted. "It hit a high of around $77 in early October, but then dropped to around $71, yet in recent days has trended upwards. There's no price crash, meaning US oil and gas markets are well-prepared to find new buyers in Asia to replace China if necessary."
Win-Win Trade Deal
"I want [the Chinese] to negotiate a fair deal with us," Trump told CBS. "I want them to open their markets like our markets are open."
Although Trump's approach definitely contradicts global trade rules, McGregor presumed that the US president may achieve his goal by raising the stakes higher.
"Trump is taking the right approach, by waiting for China to enter a truce on trade war talks," the CCTV editor suggested. "Right now, Beijing is not ready to sign a bilateral agreement with Washington and so Trump's best option is to keep turning on the screws against China so the Chinese government will start to see the benefits of ending tough trade talks."
However, as a result, the two countries will end up with a mutually beneficial trade deal, McGregor presumed.
He believes that Trump "will keep raising the stakes until Chinese President Xi Jinping makes a phone call to Trump and asks him how to resolve it so they can both sign a win-win trade deal."
China Will Not Only Survive but Thrive Without the US
According to the geopolitical analyst, "the US, while still powerful, has found itself on the losing end of the trade war because of Washington's unilateral approach to China."
Speaking to Sputnik, Garrie opined that "China's rejection (however temporary) of US energy products is more about projecting a message than about any profound shift in China's geo-economic strategy at the moment. China is an energy hungry superpower and the US is once again a major player on the energy export markets."
"Thus far in the trade war, Donald Trump has proffered a narrative that implies that like Canada and Mexico China will 'come crawling back' to the US if the trade war persists," he pointed out. "China is adamant that this will not happen and by rejecting a major source of energy on the global market, China is saying that while it prefers win-win economic relations, including with the US, China is nevertheless more than capable of not only surviving but thriving without the US."
The analyst underscored that China's rejection to buy American hydrocarbons would not deal a tremendous blow to the US, given soaring energy prices and Washington's access to plenty of markets around the world.
"Nevertheless, in the short term, just as US agriculture has been hurt by the trade war, so too might sectors that have profited greatly from exporting energy to China," Garrie emphasized.
The views and opinions expressed by the contributors do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.