Most Asian countries are racing to pledge increased imports of U.S. energy to avoid the high tariffs slapped on them in early April.
Delegations from many Asian countries are heading to Washington D.C. these days to discuss the U.S. tariffs, now suspended for 90 days, which are the highest for economies in Asia and Southeast Asia.
Thailand is looking to import higher volumes of American energy as a way to convince the U.S. Administration not to slap high tariffs on Thai goods sold in the United States.
The tariff on Thailand, which U.S. President Donald Trump announced on the so-called “liberation day” on April 2, was as much as 36%–one of the highest among all economies and jurisdictions.
Earlier this week, Indonesia, threatened with a 32% tariff, said it would offer to buy an additional $10 billion worth of American oil and liquefied petroleum gas (LPG).
South Asian nation Pakistan is actively considering the idea of importing U.S. crude oil for the first time to seek a reduction of its trade surplus with America.
South Korea is reportedly looking at more LNG imports to get Washington to drop the tariffs.
India is weighing the option to scrap its import tax on American liquefied natural gas to increase U.S. LNG imports and reduce its trade surplus with the United States.
However, commitments and contracts to buy more U.S. energy will not necessarily spare any buyer from tariffs.
Taiwan, for example, was slapped with a now-halted 32% tariff, although it had just made some big commitments to invest in the U.S., including in U.S. energy projects.
Last month, Taiwan’s state-held oil and gas company CPC Corporation signed a letter of intent to invest in the $44-billion Alaska LNG export project and buy LNG from it as part of a move to bolster its gas supply and energy security.
Taiwan wasn’t spared from one of the highest now-suspended tariffs despite being the only early committed investor in the huge Alaska LNG project, while Japan and South Korea are hesitating.
Unfortunately for Taiwan, in any negotiations with deficit-fixated President Trump, the value of its exports to the U.S. – predominantly semiconductors – vastly outstrips the value of the goods it imports from America.
By Tsvetana Paraskova for Oilprice.com