New Spat Between U.S. And China Could Crush $52 Bi
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Posted On: 05/30/2020 12:17:10 AM
New Spat Between U.S. And China Could Crush $52 Billion Energy Deal
By Irina Slav - May 29, 2020
The latest escalation between the U.S. and China could compromise U.S. energy sales worth $52 billion that China pledged to make over the next few years as part of the trade deal between the two nations.
“China could be well short of its purchasing obligations for politically important agriculture products and energy goods,” energy consultancy ClearView Energy Partners told Bloomberg. “President Trump might see more political upside in scapegoating China for the spread of Covid-19 than preserving the compact.”
The terms of the so-called Phase 1 trade deal between Washington and Beijing included the addition of U.S. energy exports to China worth some $18.5 billion this year and another $33.9 billion in 2021. The additional exports span the whole spectrum of fossil fuels and their derivatives, from crude oil and liquefied natural gas to various fuels as well as coke and coal.
Now, these are under threat if the deterioration in bilateral relations--over the coronavirus outbreak and Hong Kong--continues. What’s more, China would likely be hard-pressed to import all the $18.5 billion worth of energy supplies agreed for this year: based on customs data seen by Bloomberg, in the 12 months to this April, China’s imports of energy commodities from the U.S. were worth a meager $3.6 billion, including coal, oil, and petroleum coke, among others.
With congressmen insisting that Trump sanctions China for its new national security law for Hong Kong and with China threatening to retaliate against sanctions, the chances are that even if the situation somehow de-escalates, it would be difficult for China to by more than $15 billion worth of U.S. energy commodities this year. Its demand for energy is improving after the lockdown, but it may not be growing fast enough for such a surge in energy imports.
By Irina Slav for Oilprice.com
https://oilprice.com/Energy/Energy-General/Ne...-Deal.html
By Irina Slav - May 29, 2020
The latest escalation between the U.S. and China could compromise U.S. energy sales worth $52 billion that China pledged to make over the next few years as part of the trade deal between the two nations.
“China could be well short of its purchasing obligations for politically important agriculture products and energy goods,” energy consultancy ClearView Energy Partners told Bloomberg. “President Trump might see more political upside in scapegoating China for the spread of Covid-19 than preserving the compact.”
The terms of the so-called Phase 1 trade deal between Washington and Beijing included the addition of U.S. energy exports to China worth some $18.5 billion this year and another $33.9 billion in 2021. The additional exports span the whole spectrum of fossil fuels and their derivatives, from crude oil and liquefied natural gas to various fuels as well as coke and coal.
Now, these are under threat if the deterioration in bilateral relations--over the coronavirus outbreak and Hong Kong--continues. What’s more, China would likely be hard-pressed to import all the $18.5 billion worth of energy supplies agreed for this year: based on customs data seen by Bloomberg, in the 12 months to this April, China’s imports of energy commodities from the U.S. were worth a meager $3.6 billion, including coal, oil, and petroleum coke, among others.
With congressmen insisting that Trump sanctions China for its new national security law for Hong Kong and with China threatening to retaliate against sanctions, the chances are that even if the situation somehow de-escalates, it would be difficult for China to by more than $15 billion worth of U.S. energy commodities this year. Its demand for energy is improving after the lockdown, but it may not be growing fast enough for such a surge in energy imports.
By Irina Slav for Oilprice.com
https://oilprice.com/Energy/Energy-General/Ne...-Deal.html
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