227
therefore coal usage, so it is eager to increase LNG usage. America expects that
China will need to rely on cheap US gas form the foundation of many upcoming
US export projects. Given the Chinese tariffs, those plans may be impacted significantly. Unlike the first wave of US export terminals, the next wave of investment is
dependent on China’s growth potential. For example, the expansion of the first big
US export terminal this year (2020) was largely predicated on a new supply contract with China. More of such investments could be in doubt if the Chinese market
is not available (foreignpolicy.com 2020a, b).
US–China Trade Deal and Energy Exports
In recent years, the trade balance between the United States and China has always
been in China’s favor. Trump and previous administrations have worked hard to
reduce the trade deficit with China, but despite all Washington’s efforts, trade volume is still in Beijing’s favor. In recent years, the Trump administration has sought
to reduce imports from China by imposing tariffs on some Chinese products while
supporting US products. During these years, there were several talks between US
and Chinese officials to resolve trade issues between the two countries, and finally,
in December 2019, Trump announced in a Twitter message that he had signed a
trade agreement with China, and wrote: “We agreed on a very large contract for the
first phase, and they also agreed to make a lot of structural reforms and buy large
quantities of agricultural and energy products and industrial goods, among many
other things” (www.reuters.com 2020a, b, c, d, e, f, g, h, i).
The first phase of the US–China trade agreement was signed on January 15,
2020, by Donald Trump before the outbreak of the Coronavirus in the United States.
Under the agreement, China was required to buy $52.4 billion worth of liquefied
natural gas, crude oil, refined products, and coal from the United States over the
coming 2 years. The increase in US energy exports to China was one of the main
points of the first phase of the two countries’ trade agreement, according to which
US energy exports to China should have reached about $25.3 billion by the end of
2020 and $33.9 billion by the end of next year have been (oilprice.com 2020a,
b, c, d).
While China pledged $25.3 billion in energy imports from the United States in
2020, customs figures show that China imports energy products from the United
States, including coal, oil, and coke, from April 2019 to April 2020 totaled $3.6 billion. In the first 6 months of 2020, China was able to import only 5% of the $25.3
billion in its trade deal with the United States, according to Reuters. China imported
$1.29 billion worth of energy products from the United States between the beginning of this year and the end of June. While the Chinese government purchases of
US products have recently accelerated, analysts say lower energy prices and recent
tensions between Washington and Beijing will mean Beijing could reduce US
energy imports to put pressure on the United States. This would not adhere to the
provisions of the first phase of the trade agreement (oilprice.com 2020a, b, c, d).
US–China Trade Deal
therefore coal usage, so it is eager to increase LNG usage. America expects that
China will need to rely on cheap US gas form the foundation of many upcoming
US export projects. Given the Chinese tariffs, those plans may be impacted significantly. Unlike the first wave of US export terminals, the next wave of investment is
dependent on China’s growth potential. For example, the expansion of the first big
US export terminal this year (2020) was largely predicated on a new supply contract with China. More of such investments could be in doubt if the Chinese market
is not available (foreignpolicy.com 2020a, b).
US–China Trade Deal and Energy Exports
In recent years, the trade balance between the United States and China has always
been in China’s favor. Trump and previous administrations have worked hard to
reduce the trade deficit with China, but despite all Washington’s efforts, trade volume is still in Beijing’s favor. In recent years, the Trump administration has sought
to reduce imports from China by imposing tariffs on some Chinese products while
supporting US products. During these years, there were several talks between US
and Chinese officials to resolve trade issues between the two countries, and finally,
in December 2019, Trump announced in a Twitter message that he had signed a
trade agreement with China, and wrote: “We agreed on a very large contract for the
first phase, and they also agreed to make a lot of structural reforms and buy large
quantities of agricultural and energy products and industrial goods, among many
other things” (www.reuters.com 2020a, b, c, d, e, f, g, h, i).
The first phase of the US–China trade agreement was signed on January 15,
2020, by Donald Trump before the outbreak of the Coronavirus in the United States.
Under the agreement, China was required to buy $52.4 billion worth of liquefied
natural gas, crude oil, refined products, and coal from the United States over the
coming 2 years. The increase in US energy exports to China was one of the main
points of the first phase of the two countries’ trade agreement, according to which
US energy exports to China should have reached about $25.3 billion by the end of
2020 and $33.9 billion by the end of next year have been (oilprice.com 2020a,
b, c, d).
While China pledged $25.3 billion in energy imports from the United States in
2020, customs figures show that China imports energy products from the United
States, including coal, oil, and coke, from April 2019 to April 2020 totaled $3.6 billion. In the first 6 months of 2020, China was able to import only 5% of the $25.3
billion in its trade deal with the United States, according to Reuters. China imported
$1.29 billion worth of energy products from the United States between the beginning of this year and the end of June. While the Chinese government purchases of
US products have recently accelerated, analysts say lower energy prices and recent
tensions between Washington and Beijing will mean Beijing could reduce US
energy imports to put pressure on the United States. This would not adhere to the
provisions of the first phase of the trade agreement (oilprice.com 2020a, b, c, d).
US–China Trade Deal