USTR Considers Easing LNG Penalty Ahead of China-Ship Rule Deadline

By Ruth Liao and Joe Deaux (Bloomberg) —

The Trump administration is close to relaxing certain restrictions for liquefied natural gas companies that are part of a sweeping policy aimed at curbing China’s maritime dominance, according to three people familiar with the plans.

The US Trade Representative policy — finalized in April and set to take effect on Oct. 14 — looked to revive the US shipbuilding industry as a way to combat China’s dominance in the shipping and shipbuilding sectors. But American LNG producers say the new rule would counter President Donald Trump’s goal of shipping as much LNG as possible to the rest of the world by making the fuel more expensive and less competitive.

The USTR opened a public comment period in June to consider certain modifications to the rule. Those changes specific to LNG are being discussed within the administration with the aim that, if approved, they would be implemented by October, a person familiar said.

Spokespeople for the White House and USTR did not comment on the matter.

The changes under discussion involve a provision that would revoke Department of Energy export licenses for companies that fail to meet requirements for shipping fuel on US-built LNG tankers in the second half of the decade.

Removing the threat to yank the export permits would alleviate concerns from US LNG companies, given that existing shipbuilding capacity in the US is not equipped to churn out specialized LNG tankers that are mainly built in South Korea and Japan. 

© 2025 Bloomberg L.P.

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