You may have heard that we are in the early stages of a trade war. President Trump has leveled new tariffs against China, and China has responded. So far, China has been too afraid to place a tariff on U.S. liquefied natural gas (LNG), though.
Donald Trump has not been particularly consistent on many policy issues, but he has been complaining publically since the 1980s that trading partners like Japan are robbing America blind with unfair trade practices. China has been his biggest target since beginning his most recent foray into politics. He is particularly critical of the country’s alleged currency manipulation. During the campaign trade experts were very skeptical of his promise to impose new tariffs on other countries, but his campaign said “he is dead serious.”
After his staff reportedly held off his desire to implement tariffs for the first few months of his presidency, Pres. Trump has begun to launch escalating trade attacks against other countries. His attacks have drawn retaliations, and the tit for tat has raised prices for American consumers. Lumber prices are up 32% since Pres. Trump put a 21% tariff on Canadian lumber. The European Union has put a 25% tariff on crops, motorcycles, blue jeans, and whiskey after Pres. Trump put a 25% tariff on the imports of steel and a 10% tariffs on the import of aluminum. This is hurting American exports.
China, meanwhile, has reportedly tried to focus its retribution on exports coming from areas that support Pres. Trump. The country has put a 25% tariff on soybeans, corn, wheat, beef, pork, poultry, and automobiles. On June 19, it was reported that China is lining up another round of tariffs on American energy exports. Over the last few years, U.S. exports to China of oil, natural gas, and coal have been dramatically rising. China is reportedly going to add 25% tariffs to oil and coal, but the country is apparently unwilling to take any action against America’s LNG exports. China has been trying to move away from coal in electricity generation, and natural gas is a key part of that move. U.S. LNG seems too important for China to mess with right now.
American LNG exports are increasingly creating new markets for shale gas produced from the Marcellus Shale play in Pennsylvania, Ohio, and West Virginia. Cimmaron Land is among the best in the business at acquiring rights in the Marcellus, and we encourage you to contact us today if you are interested in opportunities in this region.