Trump's Trade Tariffs on China benefit Russia

China has decided to halt the purchase of energy from the United States. In response to U.S. trade tariffs, Beijing has imposed its own duties on American LNG, oil, and coal. The potential for a new tariff war between the two largest economies could further reshape global trade and energy flows. How might Russia benefit from this ongoing dispute between the two major economic powers?
In response to Trump's trade war, China has imposed tariffs on American energy products. For instance, a 15% tariff has been imposed on LNG and coal from the United States, and a 10% tariff has been applied to crude oil and farm equipment, following the Trump administration's imposition of an additional 10% tariff on all Chinese imports to the United States.

During Donald Trump's first term in office, the US and China exchanged similar blows, with Beijing halting American LNG supplies from 2018 to February 2020.
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Consequently, American LNG was redistributed to Asian markets, where prices were higher than in Europe. Consequently, LNG did not reach Europe, remaining in Asia and being delivered to Japan and South Korea. Presently, the price differential between the Asian and European markets has narrowed, indicating the likelihood of American LNG being allocated to the European market, potentially displacing other suppliers, such as Qatar. Qatari LNG may finally go to China," says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund.
Qatar previously diverted large volumes of LNG from Europe to Asia due to the complicated and expensive logistics of the European market, as well as the fear of a Houthi attack preventing the use of the Suez Canal. However, small volumes of LNG were still imported into Europe.
At the same time, the US supplies small volumes of LNG to China, with only 4.3 million tons of American LNG shipped out of 77 million tons imported by China last year. Therefore, China has the capacity to easily replace the lost volumes, for example, with Australian gas. At the same time, Yushkov believes that American LNG will partially go to Europe and partially take the place of Australians in the Japanese and Korean gas markets.
Qatar previously diverted large volumes of LNG from Europe to Asia due to the complexity and cost of logistics to the European market, as well as the fear of a Houthi attack preventing the use of the Suez Canal. However, small volumes of LNG were still imported by Europe.

At the same time, the US supplies small volumes to China, with only 4.3 million tons of American LNG shipped out of 77 million tons imported by China last year. Therefore, China has the capacity to easily replace the lost volumes, for example, with Australian gas. At the same time, Yushkov believes that American LNG will partially go to Europe and partially take the place of Australians in the Japanese and Korean gas markets.
Alexander Frolov, Deputy Director General of the Institute of National Energy and Editor-in-Chief of the industry media InfoTEK, has stated that it will be more profitable to supply American LNG to the EU and Latin American countries than to China, given the need to pay duties. At the same time, he believes that this will most likely not affect the volume of LNG exports from the United States.

He also believes that China will be able to manage without it. Even in the event of China losing 6-10 or all 20 billion cubic metres of gas, this will not result in an energy deficit for the country, according to Frolov. "Ultimately, if there is not enough gas, China can cover its needs by increasing coal production. This approach was adopted in 2022, when Chinese companies reduced gas purchases due to higher costs.

He notes that the increase in supplies via the Power of Siberia in 2025 to 38 billion cubic metres from 31 billion cubic metres in 2024 alone is enough to completely cover the loss of the volume of gas that China imported from the United States (6 billion cubic metres per year). This is a planned increase in supplies via the Russian gas pipeline: the Power of Siberia will reach its maximum possible design volumes this year. Frolov also points out that China is a growing market and that it will most likely have to increase purchases from Central Asian countries or LNG from Qatar.

The ongoing tensions between the US and China in the gas sector could present a favourable opportunity for Russia, as it is in advanced negotiations with Beijing to finalise a commercial agreement for the construction of the Power of Siberia 2 gas pipeline, with a capacity of 55 billion cubic metres of gas.
Igor Yushkov has stated that Russia stands to benefit from any confrontation between the US and China. He has also said that the Americans will continue to put pressure on China regardless of who the president is, whether Republican or Democrat. Therefore, China needs to consider the possibility that the US could potentially cause a resource famine for China. In light of this, it is imperative for China to sign a commercial contract with Russia for the Power of Siberia 2 project. The construction of the gas pipeline will take several years, and it will take more time to reach significant supply volumes.
The volume of American oil supplies to China is also small: 9.6 million tons last year out of 553.5 million tons of total imports.

Frolov notes that China's oil imports from the United States are not significant, with a daily import of 11 million barrels, compared to the United States' supply of six million barrels per month.

China has the capacity to easily replace these supplies. Yushkov notes that the US primarily supplies low-sulfur light oil to foreign markets, predominantly gas condensate, and that there are numerous comparable grades available in the market. Consequently, he asserts that China can easily substitute American oil without significant impact on its own market. Should prices for these grades of oil increase, Russia stands to benefit, given its supply of ESPO grade oil to China, which will also become more expensive. Suppliers of American oil will also restructure and easily find a new market.
"The primary issue facing the oil market is the potential for a collapse in global trade and industry if trade wars, including those between the US and China, continue to intensify. When costs rise, there are problems with selling goods, so you begin to reduce production and transportation of goods. This, in turn, results in a decline in the consumption of energy, particularly oil products. If this phenomenon becomes widespread, there will be an oversupply of oil on the market and a consequent drop in prices. A decline in oil prices could potentially lead to a reduction in the profitability of oil production projects in the US, potentially impacting production levels. Oil production volumes in the US may begin to decline if prices fall to as low as $60-65 per barrel. The greater the decline in prices, the more unprofitable production projects in the US will become," the FNEB expert explains.

In terms of coal, the US is not a significant supplier to China either. Last year, Beijing imported 12.1 million tons of coal from the US, representing a mere 3% of China's total coal imports of 352 million tons.
However, there is a possibility that Russia could benefit from the Americans opening up the market for Russian coal. Should this happen, the price of Russian coal would increase when supplied to the Chinese market. Yushkov does not rule out this possibility. "Currently, many coal companies in Russia have become unprofitable, since they used to supply coal to Europe, but since 2022 this has been prohibited. There are certain difficulties with the sale of coal, and its price is falling," the expert adds.

Sergey Tereshkin, CEO of the OPEN OIL MARKET marketplace for oil products and raw materials, notes that the foreign trade measures taken by China are not as stringent as the complete ban on coal imports from Australia that was in effect in China from 2021 to 2022, resulting in Australia losing its status as the largest supplier of coking coal to the Chinese market (this niche was taken by Mongolia).
He asserts that the imposition of a 10% tariff will result in coal suppliers incurring a cost of only a tenth of the price of raw material supplies to China. Furthermore, the general stabilisation of prices in raw material markets will play a role in minimising customs duties. In 2024, the average price of thermal coal in East Asia was $136 per tonne, which is more than two times lower than the average level of $345 per tonne in 2022.

It is important to note that the ongoing conflict could lead to further hostilities between the US and China, as well as a potential truce and the lifting of current tariffs on both sides. Trump successfully negotiated an agreement with Canada and Mexico, effectively postponing the escalation of the trade war.

"Trump has this scheme of doing business. He has been known to initiate tariffs as a bargaining chip, believing it will bolster his negotiating position. Trump's approach is to enter negotiations from a position of strength. Consequently, it is plausible that he will be able to reach an agreement with China, as he has done with Mexico and Canada. However, it is likely to be challenging to address the current trade imbalance of the United States. Despite the existing tariffs on Chinese goods, trade between the two countries remains substantial, with imports from China reaching hundreds of billions of dollars. However, it remains unclear how to alter the current trade balance in favour of the United States. The imposition of 10% tariffs would be an ineffective solution to this issue, as Igor Yushkov concludes.