The U.S. Department of Commerce on Thursday announced the first fruits of the Florida meeting last month between President Donald Trump and Chinese President Xi Jinping. Included among the 10 specific actions named in the agreement are the resumption of imports of U.S. beef into China and approval for China to import U.S. shipments of liquefied natural gas (LNG).
China first imposed a ban on imports of U.S. beef in 2003 after mad cow disease was discovered in an adult Holstein cow from the state of Washington. Last September, the Chinese agree to lift its ban on U.S. beef from livestock younger than 30 months, but there was little change in exports.
The new agreement on beef confirms the outline of the Obama-era deal and it remains to be seen if the results will be better.
Thursday’s agreement also included this statement regarding exports of LNG to China:
The United States welcomes China, as well as any of our trading partners, to receive imports of LNG from the United States. The United States treats China no less favorably than other non-FTA trade partners with regard to LNG export authorizations. Companies from China may proceed at any time to negotiate all types of contractual arrangement with U.S. LNG exporters, including long-term contracts, subject to the commercial considerations of the parties. As of April 25, 2017, the U.S. Department of Energy had authorized 19.2 billion cubic feet per day of natural gas exports to non-FTA countries.
According to the Department of Energy, it has received export applications totaling 54.26 billion cubic feet per day to nations with free trade agreements (FTAs) with the United States and applications to export 50.67 billion cubic feet per day to countries without free trade agreements. China is among the latter group.
According to The Wall Street Journal, China has, to date, received a “handful” of spot LNG cargoes, all from Cheniere Energy Inc. (NYSEMKT: LNG). Cheniere has not signed a long-term contract with China, however. Whether the trade agreement will result in such a deal for Cheniere or another LNG exporter remains to be seen.
According to Axios, the Obama administration approved about two dozen LNG export applications to non-FTA countries and, in 2014, sped up the federal review process for companies seeking export approval.
Cheniere’s stock traded up more than 3.5% Friday morning at a peak of $48.84, before dropping back to trade at around $47.97, in a 52-week range of $31.02 to $50.53.