The American Petroleum Institute (API) focused on the counterproductive effects of Section 301 tariffs on America’s natural gas and oil sector, mentioning that the Chinese retaliatory tariffs will damage US LNG exports.
API called the US Administration not to impose additional tariffs on Chinese products during a hearing before the US Trade Representative on Section 301.
API Director for Tax Policy Stephen Comstock, said:
Unfortunately, the current trade policies being pursued by this Administration run counter to enhancing our energy dominance throughout the world.
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For this reason, Mr. Comstock added that US needs to curb discriminatory trade practices, as the tariffs would likely slow US natural gas and oil production, threaten jobs in the industry and hurt consumers.
What is more, the tariffs come at a time when China is the third largest importer of US LNG. These export amounts have been increasing to match China’s rising demand for natural gas.
Currently, the US is still one of the world’s main LNG suppliers, but other countries are capable of supplying China, such as Australia, Qatar, Malaysia and Russia.
This trade dynamic suggests that additional tariffs by the Chinese on U.S. LNG will hurt the US more than it hurts China and naturally incentivize other LNG suppliers to fill this market.
Stephen Comstock concluded.
During August, the US Office of the United States Trade Representative (USTR) released a list of about $16 billion worth of imports from China that will be subject to a 25% additional tariff. This is a response to China’s retaliatory tariffs on $60 billion worth of US goods.
This second set of additional tariffs under Section 301 follows the first set of tariffs on approximately $34 billion of imports from China, which came into effect on July 6.
The list contains 279 of the original 284 tariff lines that were on a proposed list announced on June 15. Changes to the proposed list were made after USTR received written comments and testimony during a two-day public hearing last month.
Customs and Border Protection will begin to collect the additional duties on the Chinese imports by August 23.
A formal notice of the $16 billion tariff action will also be published in the Federal Register. The notice will announce a process by which interested persons may request the exclusion of particular products covered by a tariff line subject to the additional duties.
China had also imposed retaliatory tariffs on $60 billion worth of US goods. The products range from LNG to some aircraft and warned that it may impose more measures, indicating that it won’t step back in the trade war with the US. The tariffs range from 5 to 25%.
