In what can be touted as a major retaliation against the U.S. move of increasing tariffs on Chinese goods, the Asian Superpower has declared that it will impose a 25% tariff on the U.S. crude oil, natural gas, and coal exports from next month. Sources have claimed that it is the first time when energy will be a part of the Sino-U.S. trade conflict that impacted U.S. medical device & soybean exports and the imports of Chinese solar panels and metals.
According to energy executives, the proposed tariffs by the Chinese authorities on the U.S. petroleum products can impact its crude oil sales, China being the biggest customer of the U.S. They have further reported that the strategic move can lead to more pressure on U.S crude oil costs.
For the record, China is the largest customer of the U.S. crude oil and has imported nearly 3,63,000 barrels of crude oil per day during the past six months beginning from October last year till March this year. Analysts have declared that the imports have increased since March and will apparently hit 4,50,000 bpd in July this year.
Reportedly, the U.S. crude oil exports have increased after the 40-year old ban on crude oil exports was lifted in 2015. Industry experts predict that the tariffs imposed by China on the U.S. shale oil imports can impact the country’s market share in Asia, which it had grabbed from Middle East oil & gas producers.
Recently, Chinese authorities were in talks with the U.S. pertaining to buying more energy as well as agricultural commodities from the U.S. with the intention to reduce its USD 375 billion trade surplus with the North American country. The nation’s decision to levy 25% tariff on U.S. petroleum products may also help reduce the surplus, claim experts, as it can harm U.S crude oil exports, while promoting crude oil suppliers of West Africa to export their petroleum commodities to China.
