(Yicai) May 14 -- Despite China and the United States agreeing to temporarily suspend most tariffs on each other's goods, the Asian country will likely continue importing less crude oil and liquefied natural gas from the US and diversifying its energy import sources because relevant border taxes are yet to be fully lifted, according to experts.

China and the US released a joint statement on May 12 following talks in Geneva, announcing that they agreed to lower the import tariffs on each other's goods for 90 days. The US will cut its tariffs on most Chinese imports to 30 percent from 145 percent, while China will trim its tariffs on most US goods to 10 percent from 125 percent for 90 days, with the pair committing to take action by today.                                                           

China's tariffs on certain US imports have not been completely eliminated, Xing Yue, chief market analyst of global market intelligence firm Clarksons. Despite both sides promising to reduce tariffs, China maintained a 20 percent duty on imported US crude oil and a 25 percent on LNG, Xing added.

Oil has good liquidity, resulting in minimal price differences between global oil varieties, noted Wang Haibin, senior economist at Sinochem Energy. So with the continued 20 percent tariff, US crude oil lacks appeal for Chinese buyers, Wang pointed out.

"Regarding US LNG imports, Chinese buyers will keep a wait-and-see approach," said Xu Fei, senior gas analyst at ICIS. Although the US Henry Hub natural gas price is below USD4 per million British thermal units and still has certain competitiveness in the global market even with a 25 percent duty, the tariff outlook remains uncertain, Xu noted, adding that LNG imports typically require ordering one to two months in advance, so any changes during the period pose significant risks for buyers.

China expects to add about 7 billion cubic meters of Russian pipeline gas imports this year, effectively filling the gap left by reduced US imports, according to Feng Haicheng, natural gas analyst at Sublime China Information. With the accelerated building of underground gas storage facilities and LNG receiving terminals last year, the country's gas storage and supply capabilities are substantially improving, while strong domestic natural gas production also suppresses LNG import demand, Feng noted.

The latest US-China trade truce will improve the global economic outlook, benefiting consumer and shipping markets, according to industry experts.

China imported 9.64 million tons of oil from the US last year, accounting for 1.7 percent of its total and ranking 11th by source. In addition, it imported 4.16 million tons of LNG from the US, making up 5.4 percent of its total and ranking fifth by source.

However, due to the increasing tariffs, China's imports of US oil plunged 58 percent to 829,000 tons in January from a year earlier, 76 percent to 278,000 tons in February, and 70 percent to 258,000 tons last month, according to data from Kpler.

China has also not brought in any LNG from the US since it imposed an additional 15 percent border tax in February, Wang Yafei, a natural gas analyst at JLC, previously told Yicai.  

Editor: Martin Kadiev