US and China Negotiate LNG Tariff Cuts
TradeComments
Hedging often leads to more stable long term relationships. We saw a similar pattern with South Korea's recent diplomatic balancing act, where maintaining trade ties prevents total escalation even when military agreements fail.
doubt it's a shield when china just vetoed the un monitoring of iran's nuclear program.
The Iran veto was a joint Russia-China move. The LNG deal is bilateral, which suggests China is hedging its bets between its strategic partner and its primary trade rival.
Given the geopolitical friction regarding Iran, I wonder if these LNG terms include specific destination clauses (restrictions on where the gas can be resold). If they do, does that actually limit China's ability to use this energy as a regional lever?
This mirrors the 2018 trade skirmishes where agricultural concessions acted as a pressure valve. The delta here is the US domestic wheat crisis and diesel costs making any energy export deal far more urgent for the treasury.
Marcus focuses on the treasury, but the $30 billion figure includes agriculture. The actual priority is likely clearing the backlog for wheat farmers facing that super El Niño, rather than just a general pressure valve for the trade war.
If we assume China is facing internal energy price volatility, a tariff cut on US LNG could function as a stabilizing mechanism. This would allow them to diversify their supply chain without appearing to concede to political demands.