As Trump announces his return to the White House, the global energy market, especially the trade pattern of LNG, faces new uncertainties. During his campaign, Trump promised to accelerate the approval of LNG export licenses, but at the same time, he threatened to impose tariffs of up to 60% on all Chinese product. He also indicated that he does not care if China takes retaliatory measures to increase tariffs on American products. The market is seriously concerned that Sino-U.S. trade involving 18.5 Mtpa of LNG may be affected during Trump's term.

According to Kpler data, as of 2024 YTD, U.S. exports to China account for 5.2% of its total LNG exports, an increase of 1.2 percentage points from 2023. In China's LNG imports, as of 2024 YTD, the proportion of U.S. resources is 6%, an increase of 1.6 percentage points from 2023. However, Sino-U.S. trade frictions may lead to a significant increase in the import cost of U.S. LNG for China, affecting the willingness of Chinese buyers to purchase.

In the long-term contracts signed by Chinese companies with U.S. LNG suppliers, a considerable proportion of the contract terms are FOB (Free on Board), which means there is no clear restriction on the final destination of the goods. Chinese companies can seek alternative suppliers in the global market to avoid potential trade risks through flexible transactions and other means. In addition, the long-term contracts for portfolio LNG signed by Chinese buyers with global suppliers, where the price is linked to the HH (Henry Hub) index, are very likely to be sourced from the United States. This part can be considered as implicit U.S. origin contracts.

According to SCI statistics, in 2024, the volume of Sino-U.S. LNG contracts in effect (including implicit U.S.-origin contracts) is nearly 5.1 Mtpa, and it is expected to reach 18.5 Mtpa by 2028, the last year of Trump's second term, with FOB contract volumes accounting for 14.7 Mtpa. Regarding the number of buyers with explicit U.S.-origin contracts, there are 4 in 2024, and this number is expected to increase to 8 by 2028. According to SCI forecasts, the potential Sino-U.S. LNG trade volume of 18.5 Mtpa will account for 14% of China's LNG import demand in 2028.

According to the International Gas Union's "World LNG Report 2024," the United States, as the world's largest LNG producer and exporter, reached an export volume of 84.53 Mtpa in 2023, accounting for 21% of the global LNG export trade. By 2030, based on existing and under-construction capacities, the U.S. is expected to account for 24% of the global LNG export capacity.

Considering the prevalence of U.S. resources in the global market, completely bypassing U.S. LNG would still be challenging and would greatly rely on the resource coordination capabilities of Chinese buyers in global LNG trade. Generally speaking, the NOCs in China have a comparative advantage in this area, while portfolio buyers mostly need to rely on coordination with suppliers to try to minimize U.S. LNG as much as possible.

However, Trump's policies may also pose significant risks to U.S. LNG exports. Some market players have indicated that such policies could not only harm the U.S. economy but also trigger a redistribution in the international market, weakening the competitive edge of the U.S. in the global LNG market.

In summary, the policy changes following Trump's inauguration will bring challenges to Sino-U.S. LNG trade. Chinese buyers need to respond flexibly and plan ahead to ensure the stability and economy of their energy supply, while U.S. exporters must closely monitor policy trends to preserve their position in the global LNG market.