Media reported on the possibility of retaliatory duties by China to reduce US exports

Retaliatory Chinese duties against the United States could lead to a reduction in U.S. oil exports in 2025 for the first time since the beginning of the COVID-19 pandemic. This was reported by Reuters on February 6.

It noted that U.S. crude oil exports have increased more than 10-fold since the federal oil export ban was lifted in 2015. That has helped the United States become the world's third-largest exporter after Saudi Arabia and Russia, mitigating the global impact of production cuts by OPEC and its allies.

Although China's demand for U.S. crude has fallen in recent years thanks to discounts on Russian and Iranian oil, its exports in 2024 were 166,000 bpd, equal to nearly 5 percent of all U.S. crude exports, according to ship-tracking data from Kpler, Reuters wrote.

According to the agency, growth in U.S. oil exports slowed in 2024, rising just 0.6% or 24,000 bpd in 2024, due to a curb on shale oil production amid global demand fears.

Kpler analyst Matt Smith called China's share of US exports "not insignificant" and said international demand for US oil exports may have peaked "and China's retaliatory duties can only accelerate that".

It is specified that about 48% of US crude oil imported by China was medium-density grades with higher sulfur content. This type of crude is ideal for processing at U.S. refineries and can be easily traded domestically, especially if the U.S. imposes duties on Canada and Mexico, analysts said.

About 44% of China's crude imports from the U.S. came from lighter, lower-sulfur grades such as West Texas Intermediate, produced in Texas, which are known as light, sweet grades. This type of crude is in demand from European and Indian refineries at competitive prices and can continue to be exported, analysts said.

Response to the measure: China may shift business to Southeast Asia due to US duties

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The day before, Maxim Chirkov, an associate professor at the Department of Economic Policy and Economic Measurements of the State University of Russia, told Izvestia that a trade war between the United States and China would have a negative impact on the global economy. According to him, China's retaliatory measures, including tough economic sanctions, have already started to limit global trade, which will eventually lead to a slowdown in global GDP growth.

Earlier on February 4, China's State Council said that China will impose duties of 15% on coal and liquefied natural gas (LNG) from the United States starting February 10. In addition, it was noted that tariffs of 10% will be imposed on U.S. crude oil, multi-liter vehicles, pickup trucks and farm machinery.

On the same day, new duties on imports from the PRC came into force in the United States. The amount of the tax is 10%. In general, in relation to China, lower tariffs were introduced than planned. Earlier, US President Donald Trump said that the tax will amount to 60%.

Prior to that, on February 1, Trump signed an executive order to impose trade tariffs of 25% on goods from Canada, China and Mexico. Then he also promised to impose duties on goods from the EU.

Chinese economist Andrew Leung, in turn, told Izvestia that the tariffs imposed by Trump on imports of goods from China and Mexico will lead to an increase in consumer prices in the United States itself.