US-China trade war intensifies: Tariffs shake energy, agriculture sectors

In a recent article, Glass Almanac highlights that as trade tensions between the US and China heat up in 2025, both countries are retaliating with fierce tariffs, rattling key sectors like energy and agriculture. 

While the tariff war is nothing new, China’s recent moves signal a deeper, strategic shift—one that could reshape global trade dynamics. From halting American LNG imports to seeking alternative agricultural sources, Beijing is diversifying its supply chains, forcing US industries to adapt to a new, uncertain economic reality.

The US has raised tariffs on Chinese imports to 145 per cent, while China retaliated with 125 per cent tariffs on American products. 

One of the most notable shifts in China’s import strategy is seen in the liquefied natural gas (LNG) market. In the first quarter of 2025, American LNG imports to China nearly halted, continuing a trend that began earlier in the year. This reduction could significantly alter the energy trade balance between the two nations. To counteract this, China has increased its LNG purchases from countries such as Qatar and Indonesia, while strengthening its energy partnership with Russia. China is also ramping up investments in renewable energy and coal as alternative energy sources.

This move signals a broader strategic effort by China to diversify its energy imports and lessen its reliance on US exports. By diversifying suppliers, Beijing avoids the financial strain of rising tariffs and sends a clear message of energy independence. Over time, this could reshape global energy markets and have lasting effects on the US LNG export industry.

China is also shifting its agricultural trade approach, with a noticeable decline in wheat imports from the US In 2024, a significant portion of China’s wheat came from the US, but these imports have sharply decreased. It remains uncertain whether this is a temporary response to tariffs or the start of a longer-term shift in China’s sourcing strategy. If the change is permanent, it could severely affect American farmers who depend on Chinese demand.

These shifts raise the question: Is this simply an economic adjustment, or does it reflect a more politically significant strategy by China? As China seeks new trade partners and diversifies its supply chains, the US faces new challenges in maintaining its position as a major supplier to the world's second-largest economy. The outcome could reshape global trade dynamics, especially for industries reliant on US-China commerce.

By Naila Huseynova