‘Mutual gain’: Trump-Xi talks could mean US$6 billion of US natural gas for China

President Trump and Chinese President Xi Jinping are set to meet in Washington, with a potential deal to revive $6 billion in US liquefied natural gas (LNG) trade for China among the key talking points. The two nations have a longstanding relationship in this area, but it has been strained since February 2025 when President Trump initiated a series of tariffs on US natural gas exports, prompting China to retaliate with punitive duties on the fuel.

Despite this, Chinese firms have been continuing to honor their contracts with US suppliers, but have been reselling the gas to buyers in Europe and Asia instead of bringing it back to China to avoid the 15% levy. Experts believe that a restored trade relationship could be mutually beneficial, bolstering the growth of the US LNG industry while providing China with a valuable source of energy.

For Beijing, LNG is a relatively minor concession; however, it is an important one, as China's major supplier, Qatar, is struggling to meet demand due to restrictions around the Persian Gulf. For the Trump administration, a deal would be a strong signal, as the US gas sector is expanding and in need of fresh commitments. If concluded, the deal would add to the already existing 14 million tonnes of LNG contracts signed between the two countries, valued at $6 billion at long-term prices.

Chinese companies are already positioning themselves for the potential deal, with China Gas recently announcing a 20-year supply agreement with US LNG exporters that begins in 2030, a rare long-term contract in the industry. The potential revival of the trade relationship is further encouraged by rising geopolitical tensions in the Persian Gulf, which have caused a spike in spot LNG prices.

A restored trade agreement could help provide stable, long-term supply and protect US exporters from price fluctuations.