US Secretary of the Treasury Steven Mnuchin and Trade Representative Robert Lighthizer will resume trade talks in Shanghai on July 30, with a focus on agriculture, the trade deficit and other issues, the White House said Wednesday.
Analysts remain skeptical that the two sides can reach a broad deal to end the trade conflict that has slowed US exports of LNG, crude, soybeans and other agricultural products.
Vice Premier Liu He will lead the talks for China, the White House said.
ClearView Energy Partners managing director Kevin Book said prospects still look dim for a deal that would address US' demands for "substantial and durable Chinese reforms, expanded market access and intellectual property controls."
Book said comments by President Donald Trump since he met with Chinese President Xi Jinping in June suggest "some willingness" to proceed with 25% tariffs on $300 billion worth of Chinese goods.
"China is letting us down in that they have not been buying the agricultural products from our great farmers that they said they would," Trump tweeted on July 11. "Hopefully they will start soon!"
US crude exports to China dried up in August through November 2018 and again in January even though the product has not been officially targeted by retaliatory tariffs. The US exported an average of 62,000 b/d of crude to China in April, according to the most recent US Energy Information Administration data, well below the monthly peak of 510,000 b/d in June 2018.
The ongoing trade dispute has continued to impact LNG trade flows, and absent a resolution those changes are expected to remain in place.
China first imposed a 10% tariff on imports of US LNG in September 2018, in retaliation for tariffs the US imposed on imports of Chinese goods. In June, China raised its tariff on imports of LNG from the US to 25%, in retaliation for increased US tariffs.
While the two sides later agreed to halt further tariff increases, as they try to negotiate a comprehensive trade deal, shippers from US LNG facilities will continue to face adjustments as long as the existing duties are in place.
As of last week, no US LNG had been delivered to China since March 18, S&P Global Platts Analytics data show. The period of no deliveries included the entire second quarter. Nine cargoes arrived during the same three-month period a year earlier.
Shipments to Spain, France and Chile have helped pick up the slack for US LNG exporters. But concerns remain, especially for developers of liquefaction projects that are currently being proposed. That is because China is expected to become the world's biggest importer of LNG within the next decade.
"We think the lack of Chinese involvement has dampened greenfield viability, likely helping to push many out to the next cycle," Wells Fargo Securities analyst Michael Webber said in a note to clients Wednesday.
