226
Limited and Jovo Energy Co., who have access to terminals. As a cost-cutting measure, these independent companies are taking in effect as little as possible under
their long-range gas agreements, exercising downward quantity tolerances (DQT)
of their offtakes, and replacing a small portion of their contract supplies with lower
cost short-run, spot LNG imports from regional suppliers such as Qatar and Australia
(www.cfr.org 2020a, b, c).
A second Trump administration will see a continued isolationist and nationalistic
view toward foreign policy and trade. Transactional relationships will continue to be
valued above conventional alliances and shared values. Bringing manufacturing and
jobs back to the continental United States will be at the core of trade agreements. On
the other hand, a democratic administration would adamantly support the traditional
US alliance system, despite skepticism toward globalized and multilateral trade.
Such an administration would also place greater emphasis on human rights and
democracy, and as noted above, climate change. These values would be at the heart
of foreign relations and future trade deals (www.atlanticcouncil.org 2020a, b, c, d,
e, f, g, h, i).
Looking forward, whether a second Trump administration or a Democratic
administration, both present challenges. Unfortunately, the broader context suggests
that the main challenges meeting the US and global energy markets will remain
unresolved. This is observed particularly in terms of climate change. In short, this is
a new territory for US energy policy. It seems no one candidate has viable solutions
to cover the myriad of challenges before them. While these issues remain unresolved, the fuel industry should expect that management of permits, export, and
trade policy and the energy mix will remain problematic (www.atlanticcouncil.org
2020a, b, c, d, e, f, g, h, i).
The Obama administration sought to establish the Trans-Pacific Partnership in
2016 as a multilateral trade agreement to remove borders and to increase transparency among participants. The agreement was designed to isolate any signatory acting in bad faith. However, President Donald pulled the US out of the agreement in
2017, while the other parties moved ahead with it. Rather than forming a partnership, the US enforced tariffs on China, who responded in the same manner. At this
juncture, trade battle is still ongoing, a situation the US Federal Reserve Board has
described as a failure. It is hard to see how the US president could scale up the trade
war against China in an election year, yet his bravado continues to have negative
impacts on relations between the two states. China is pushing back against the
actions of the US, and until the electorate speaks there may be no end; in what may
be a neo cold war, the US economy may pay a great price for Trump’s actions
(www.forbes.com 2020a, b, c, d, e).
That could spell trouble for the US, which has benefited from the development
to become a major global supplier of natural gas and crude oil, including to China.
Although smaller than initially threatened, the Chinese tariff pushes up the cost of
US gas in what is the world’s second-largest LNG market. As a result, China is
likely to look elsewhere to meet its energy needs. The United States started exporting large amounts of LNG in 2016, and China has become the third-biggest buyer
after Mexico and South Korea. Beijing is attempting to reduce pollution, and
6 Trump Energy Diplomacy
Limited and Jovo Energy Co., who have access to terminals. As a cost-cutting measure, these independent companies are taking in effect as little as possible under
their long-range gas agreements, exercising downward quantity tolerances (DQT)
of their offtakes, and replacing a small portion of their contract supplies with lower
cost short-run, spot LNG imports from regional suppliers such as Qatar and Australia
(www.cfr.org 2020a, b, c).
A second Trump administration will see a continued isolationist and nationalistic
view toward foreign policy and trade. Transactional relationships will continue to be
valued above conventional alliances and shared values. Bringing manufacturing and
jobs back to the continental United States will be at the core of trade agreements. On
the other hand, a democratic administration would adamantly support the traditional
US alliance system, despite skepticism toward globalized and multilateral trade.
Such an administration would also place greater emphasis on human rights and
democracy, and as noted above, climate change. These values would be at the heart
of foreign relations and future trade deals (www.atlanticcouncil.org 2020a, b, c, d,
e, f, g, h, i).
Looking forward, whether a second Trump administration or a Democratic
administration, both present challenges. Unfortunately, the broader context suggests
that the main challenges meeting the US and global energy markets will remain
unresolved. This is observed particularly in terms of climate change. In short, this is
a new territory for US energy policy. It seems no one candidate has viable solutions
to cover the myriad of challenges before them. While these issues remain unresolved, the fuel industry should expect that management of permits, export, and
trade policy and the energy mix will remain problematic (www.atlanticcouncil.org
2020a, b, c, d, e, f, g, h, i).
The Obama administration sought to establish the Trans-Pacific Partnership in
2016 as a multilateral trade agreement to remove borders and to increase transparency among participants. The agreement was designed to isolate any signatory acting in bad faith. However, President Donald pulled the US out of the agreement in
2017, while the other parties moved ahead with it. Rather than forming a partnership, the US enforced tariffs on China, who responded in the same manner. At this
juncture, trade battle is still ongoing, a situation the US Federal Reserve Board has
described as a failure. It is hard to see how the US president could scale up the trade
war against China in an election year, yet his bravado continues to have negative
impacts on relations between the two states. China is pushing back against the
actions of the US, and until the electorate speaks there may be no end; in what may
be a neo cold war, the US economy may pay a great price for Trump’s actions
(www.forbes.com 2020a, b, c, d, e).
That could spell trouble for the US, which has benefited from the development
to become a major global supplier of natural gas and crude oil, including to China.
Although smaller than initially threatened, the Chinese tariff pushes up the cost of
US gas in what is the world’s second-largest LNG market. As a result, China is
likely to look elsewhere to meet its energy needs. The United States started exporting large amounts of LNG in 2016, and China has become the third-biggest buyer
after Mexico and South Korea. Beijing is attempting to reduce pollution, and
6 Trump Energy Diplomacy