China slaps extra 15% tariffs on US coal, LNG, 10% on US crude in Trump retaliation

China is set to impose an additional 15% tariff on US coal and LNG, and 10% more on US crude imports from Feb. 10, its finance ministry said Feb. 4, in retaliation to US President Trump's additional 10% tariffs on Chinese goods, effective Feb. 4.

Just hours earlier, Trump suspended his earlier threat of a 25% tariff on all imports from Mexico and a 10% tariff on energy imports and 25% on non-energy imports from Canada, after agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighboring countries, although this was not extended to China.

China had called the US' unilateral tariffs a serious violation of the World Trade Organization rules, and its commerce ministry said days earlier that it would file a suit with the WTO on this.

Other US goods affected by China's retaliatory tariffs include anthracite and lignite, which will face an additional 15% tariff, as well as agricultural machinery, large-displacement vehicles and pickup trucks, which will face another 10%.

This latest announcement marks another major trade conflict between the world's two largest economies since 2018. Analysts have warned that these tit-for-tat measures could disrupt global energy markets, particularly LNG and crude oil supplies, while further straining diplomatic relations.

If a situation similar to the 2018 US-China trade war arises again, Chinese LNG importers may have no choice but to replace US LNG with non-US cargoes in the spot market as they did before, a trade source with one of the national oil companies said earlier.

In 2024, China imported $163 billion worth of goods from the US, including $3.25 billion in crude oil, $651.65 million in LNG and $520.99 million in coal, Chinese customs data showed.

The newly imposed tariffs may accelerate Beijing's efforts to diversify energy imports toward suppliers like Russia and Qatar, domestic trade sources said.

Despite being the world's fourth-largest crude oil producer by volume, China relies on imports for around 70% of its supply. The recent US sanctions on Russian and Iranian barrels disrupted crude supplies to China, while China's US crude imports in 2024 dipped 33% year over year to 193,000 b/d, according to Chinese customs data.

Wider Asia implications

If a new Washington-Beijing trade conflict unfolds, limiting China's energy trades with the US, other major Asian buyers of WTI Midland crude could have a bigger opportunity to procure additional spot cargoes of the light sweet US crude, feedstock managers at two major South Korean refiners told S&P Global Commodity Insights.

Major South Korean refiners and petrochemical companies, including SK Innovation, Hyundai Oilbank and Hanwha Total, collectively imported 168.43 million barrels of US crude in 2024, up 18.3% from 2023. This marks the largest annual US crude purchase in Asia, according to a Commodity Insights analysis based on Korea National Oil Corp data.

"Light sweet US crude has been a staple feed for us over the past decade, and China's potential slowdown in WTI Midland crude intake might just present a good opportunity for South Korea to absorb those Asia-bound US supplies, hopefully at a bit of discount," said a senior feedstock manager at an Ulsan-based refiner in South Korea.

US goods affected by China's retaliatory tariffs

Items subjected to additional 15% tariffs:

Items subjected to additional 10% tariffs*:

* The list is non-exhaustive and includes agricultural machinery, tractors and an array of vehicles across engine types and capacity.

Source: China's Ministry of Finance