Major Alaska energy deal involving Japan, South Korea, Taiwan could narrow US trade deficit

A major energy deal in Alaska involving Japan, South Korea and Taiwan could help narrow the US trade deficit with these countries, US Secretary of Treasury Scott Bessent said April 8.

"A big energy deal in Alaska where the Japanese and perhaps the Koreans, perhaps the Taiwanese would provide -- would take a lot of the offtake and provide financing for the deal," Bessent said in an interview with CNBC.

"So that could be an alternative for them to come forward with that because not only would that provide a lot of American jobs, but it would narrow the trade deficit," he added. "Everything is on the table."

On April 2, US President Donald Trump announced sweeping new tariffs on imports from major trading partners, outlining a 10% baseline tariff on all imported goods, which took effect on April 5. Japan faces a 24% reciprocal tariff, South Korea a 25% tariff and Taiwan a 32% tariff, effective April 9.

"Well, look, the -- my advice on April 2, our trading partners was not to panic, don't escalate. And then we will see where President Trump is after a period of days or weeks. The response was overwhelming. So it was after a period of days. And he decided that it would be a good time to begin negotiating," Bessent said.

Bessent was appointed by Trump to open trade negotiations with Japan, following an April 8 phone conversation with Prime Minister Shigeru Ishiba.

"The Japanese are military partners, their economic partners. We have a substantial imbalance with them, and I'm sure that they are as anxious as we are to get this remedied," Bessent said.

Alaska pipeline

In a post on his Truth Social social media platform on April 8, Trump said he had a call with South Korea's acting President Han Duck-soo, during which they discussed topics including tariffs, shipbuilding, the "large scale purchase of US LNG [and] their joint venture in an Alaska pipeline," among others.

"Their top team is on a plane heading to the US, and things are looking good," Trump said.

In his speech to Congress on March 4, Trump said, "My administration is also working on a gigantic natural gas pipeline in Alaska, among the largest in the world, where Japan, South Korea and other nations want to be our partners with investments of trillions of dollars each."

"It will be truly spectacular. It is all set to go," Trump added.

Minister of Trade, Industry and Energy Ahn Duk-geun said March 20 that South Korea may increase LNG purchases from the US and review its push for the Alaska LNG project before deciding whether to join the project, as part of efforts to address Trump's trade and tariff pressures.

Most recently, the US, Japan and South Korea committed to placing US LNG to bolster energy security and for mutual benefits, the countries said in a joint statement following a foreign ministerial trilateral meeting in Brussels on April 3.

"The Secretary and Foreign Ministers committed to continue strengthening energy security and energy cooperation, underpinned by America's LNG and other energy sources and technologies, in a mutually beneficial manner," the joint statement said.

Taiwan's recent letter of intent, signed by CPC Corp. with Alaska, envisages the state-owned Taiwanese company purchasing a total of 6 million mt/year of LNG from the US state and includes a potential investment in the project, according to Alaska Governor Mike Dunleavy.

The governor's comments followed CPC's March 20 signing of the letter of intent for the potential purchase of LNG from the planned Alaska LNG project and the opportunity to participate in upstream investment.

The letter of intent was signed by CPC and the Alaska Gasline Development Corp. during an Alaska delegation visit to Taipei, according to a statement from Taiwan's economic affairs ministry.

The 20-million-mt/year Alaska LNG project had struggled to gain traction for years amid the state's long-running challenges, including high project costs and difficulty securing customers. This led the state to shift efforts toward turning the project over to private interests.

US-based Glenfarne, which signed a deal with the Alaskan government entity managing the proposed Alaska LNG export project, said on March 28 that it expects to reach a final investment decision in 2025 on a portion of an 800-mile pipeline that would connect Alaska North Slope supplies to the export terminal in Nikiski, located on the Kenai Peninsula in the southern part of the state.

Dunleavy, speaking in March at the CERAWeek energy conference by S&P Global in Houston, said he expects the LNG project to start up within five years, with interest from Japan, South Korea and Taiwan.