U.S. exports of crude oil, liquefied natural gas, and coal reached a total of zero last month amid the continuing trade war that had China impose retaliatory tariffs on these U.S. commodities, which led to a slump in purchases.
In liquefied natural gas, Chinese buyers have been at zero since March, when the retaliation began. Crude oil followed, with volumes declining since March to reach none at all in June, according to a Bloomberg chart citing official customs data from Beijing. Coal purchases have also died down.
This is taking place ahead of the next round of trade talks between the two countries, to take place in Sweden next week. U.S. Treasury Secretary described current relations as being “in a good place.” Chinese officials, for their part, have signaled a readiness on the part of the country’s government to reach a mutually beneficial deal. An official statement said that the Chinese side hoped for an atmosphere of “mutual respect, peaceful coexistence and win-win cooperation,” at the talks.
Trump has given China a deadline to August 12 to negotiate a deal. Otherwise, he threatened to slap even higher tariffs on Chinese imports. China’s retaliatory tariffs on U.S. energy exports range between 10% and 15%.
During Trump’s first presidency, China caved to pressure to buy more U.S. energy commodities to make up for its trade surplus with Washington. The pandemic, however, interfered with its attempt to live up to this commitment.
Since then, however, a lot has changed, notably in China’s diversification of energy suppliers, with OPEC+ emerging as the dominant group at the expense of the United States. This means that, this time, China may be more resilient to pressure coming from the White House than it was five years ago, especially with oil demand set to slow down in the world’s biggest importer.
By Irina Slav for Oilprice.com
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