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Energy Takes Center Stage in Trump Trade Talks

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As world officials converge on Washington in a bid to strike deals and head off steep “reciprocal” tariffs, energy has emerged as a key topic in negotiations — particularly for governments from Asia and Europe. Several Asian governments have unveiled plans for stepped-up purchases of US LNG under packages of concessions aired ahead of sending delegations to Washington in the hope of securing relief from Trump’s threatened tariff rates of up to 49%. LNG has also featured in European discussions, with some deals already emerging from buyers there. During President Donald Trump’s first term, some governments were able to satisfy US trade demands by pledging purchases or other commitments already planned, but it’s not clear that this approach will pass muster this time. Negotiators are also reportedly facing challenges with the loose and ill-defined nature of US requirements and uncertainty over the precise motivations behind the broad tariffs proposed on Apr. 2 — although the US’ large trade deficits clearly underpinned both the political push and the calculation of rates. EU diplomats have been trying to engage Trump officials on trade for several months, but reports claim this outreach has been met with a lack of interest or engagement. “The administration has not been fully staffed up yet,” especially for many key midlevel slots, one Washington-based industry source said. “Everybody is still scrambling for details.” Security allies Japan and South Korea also face demands to include cost-sharing of US military support, complicating negotiations. China and the US remain locked in a standoff for now. In Trump’s first term, Beijing agreed to buy $200 billion of additional US goods, including LNG, in a 2020 Phase 1 deal, but actual volumes fell far short of this target.

Topics:
Tariffs, LNG Trade, Trade, Macroeconomics
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