China completely stopped purchasing US LNG on 10th February, following the introduction of a 15% tariff on LNG imports, according to ship tracking data.
Data from China’s customs service showed that Chinese US LNG imports had already fallen during between November, 2024 and January this year.
At the same time, China has increased its gas purchases from Russia, which last year delivered four times more LNG to the country than the US.
Only two LNGCs from the US were en route to China when Beijing imposed tariffs on US fossil fuels in response to the initial round of 10% tariffs on Chinese goods introduced by US President Donald Trump earlier this year.
According to information provider, Kpler, one vessel arrived in China before the tariffs took effect and discharged its cargo, while the other was diverted to Bangladesh.
Drewry Maritime Research said in a recent report that China’s increasing domestic production, robust Russian gas supplies via the Power of Siberia pipeline and lower imports in 1Q25 (down 24% year-on-year) played a crucial role in supporting the country’s stance against US LNG.
Other suppliers
China’s reliance on other suppliers, such as Qatar, Russia, and Australia, will increase further, once its demand rises.
This will dent shipping demand since longer US/Asia voyages (via Cape of Good Hope) will see a decline. About 80-90 shipments from the US to China via the Cape route will be affected if an elongated trade war transpires, Drewry calculated.
If the US/China trade persists, about 80 bill tonne/miles will be generated (considering US/China voyages via COGH).
However, if China takes more LNG from Qatar, Australia and Russia, the total tonne/miles generated would be around 35 bill, indicating a potential loss of 45 bill tonne/miles for LNGCs (some 45-50 LNG shipments).
Europe is increasingly receiving LNG from the US and China, so its LNG prices should ease. However, this could be challenged, once the continent’s demand subsides, as Europe’s restocking season ends and China’s domestic LNG demand soars, especially during this summer and if the Chinese economy revives.
According to Drewry’s contracts database, China had secured considerable contractual capacity with the US since 2021, signing about 18 medium-to long-term sale and purchase agreements (SPAs) (totalling 28 mill tonnes per annum) with extended supplies until 2040.
In addition, due to the tariff wars, the US economy could face higher inflation, which could derail the pace and financing for planned LNG projects, despite regulatory easing following Trump's lifting of the pause on US LNG export permits and licenses.
While in the short term, the impact of the US/China trade war will have a limited effect on LNG shipping rates, rising tariff tensions could increase fears of a global recession, dampening project developments and threatening future capacities.
This could put the future of LNG shipping at a significant risk, denting the expected recovery in rates towards 2027/28.
Any rate recovery largely hinges on 1) anticipated liquefaction capacity addition, with the US commanding the largest share in planned volumes, 2) increased Asian LNG demand, buoyed by lower prices and 3) expanded US/Asia trade, given contracting activities in the recent years, Drewry said.
Chinese customs figures showed that LNG imports into China declined by 24.5% in March, compared to the same month in 2024, while pipeline gas increased by 2%.
In total, China imported 9.2 mill tonnes of LNG and pipeline gas during the month.
