U.S. LNG Exports are Trump’s Trade Right Sizing Ace in his pocket

Energy News Beat

President Trump has the right ideas and the right people in place to right size the trade imbalances, debt, and fiscal responsibility. What many people do not understand is why tariffs, if properly managed, can bring prosperity and wealth to Americans.

The Trump administration is looking at several things. The trade balances, the Treasury balance sheet, and the Fed. Some of his roadblocks are the EU, the UK, China, and Mexico. In the EU, you do not have Ram, Ford, GM, or other manufactured cars. Why? Because they already have trade blocks or tariffs in place. The products that they want from America are on the short list, and LNG, refined petroleum products, gasoline, and jet fuel should be at the top of the list. Manufactured products should be there, but it will take years to get the volume and demand up.

That leaves LNG as the king of the trade deficit offsetting product. But how much can we offset? That is a critical and challenging question. To guarantee energy security in long-term contracts, our shipping, shipbuilding, steel, and manufacturing must be looked at. President Trump has the new Shipyard office in the White House to gain investors and rebuild our ship and tanker business. We also need to look at putting in a recycling yard for older tankers to be used in building the new tankers flagged under the U.S. for long-term contracting. This would help the steel industry by having a source of material suitable for building quicker. Without a fleet of LNG tankers, we will be subject to sanctions from other countries and at the whim of other leaders.

When looking at the trade balances, let’s see how we stand worldwide.

In 2024, the full-year Trade Deficit by country stacked up by the following:

• China: -$295.4 billion
  • Largest U.S. trade deficit, though down from its 2018 peak of $418 billion due to tariffs and supply chain shifts.
• European Union (27 countries): -$235.6 billion
  • Includes significant deficits with Germany (-$84.8 billion) and Ireland (-$86.7 billion).
• Mexico: -$171.8 billion
  • A record high for this bilateral relationship, driven by imports of vehicles and parts.
• Vietnam: -$123.5 billion
  • The fourth-largest deficit, reflecting increased manufacturing shifts from China.
• Ireland: -$86.7 billion
  • Notable for pharmaceuticals and tech goods.
• Germany: -$84.8 billion
  • Driven by auto parts, vehicles, and machinery.
• Taiwan: -$73.9 billion
  • Surge linked to electronics and semiconductor supply chains.
• Japan: -$68.5 billion
  • Primarily vehicles and machinery.
• Canada: -$63.3 billion
  • Below its 2022 peak of -$78 billion, with energy and autos as key imports.
• South Korea: -$66.0 billion
  • Electronics and vehicles dominate imports.

Other notable deficits from 2024 include:

• India: -$45.7 billion
• Italy: -$44.0 billion
• Thailand: -$45.6 billion
• Switzerland: -$38.5 billion
• Malaysia: -$24.8 billion

The U.S. also had trade surpluses with some countries in 2024, such as:

• Netherlands: +$55.5 billion
• South and Central America: +$47.3 billion
• Hong Kong: +$21.9 billion
• Australia: +$17.9 billion

Canada, in my opinion, should be treated differently as we need the Canadian heavy oil sands for our refineries, and I would rather trade with Canada than Venezuela, Iraq, or Iran. It is also important to note that California is a national security threat to the United States as it imports 60% plus of its oil from sanctioned or not-the-best trading partners in the country.

So in 2024, the estimated total trade imbalance is about $1.2 trillion. We do not have that amount available in trade in LNG capacity, so let’s see how much we have to work with. And in 2024, the U.S. LNG Exports are estimated to be $26 billion.

Grok on X gave me a good formula at:

• Price Estimation: Historical data from EIA and Reuters suggest an average export price of around $5-$7 per mmBtu when including liquefaction and shipping costs (higher than Henry Hub prices due to added expenses). Assuming an average of $6 per mmBtu for 2024 (accounting for the reported price drop and recovery), and knowing 1 Bcf = 1,000 mmBtu, the daily value can be estimated.
• Daily Value: 12 Bcf/d × $6/mmBtu × 1,000 mmBtu/Bcf = $72 million per day.
• Annual Value: $72 million/day × 365 days = approximately $26.28 billion.

While $26.8 billion is not a small number, it can be dramatically increased with the focus that this White House is placing on getting the trade barriers right-sided. President Trump will need to look at products to export to make up the huge deficit out there, and as a United States legal citizen, I will pay more for a product made in the United States, knowing it will support legal US citizens.

Some of the other products that could be low-hanging fruit would be the feedstocks, petrochemicals, and downstream products, and I would recommend looking at exporting our modular nuclear reactors. Russia is already way ahead of us by exporting nuclear power plant projects, and it is a great way to get long-term contracts and build business relationships.

I am working on a series of articles for The Energy News Beat Substack for our paid subscribers and will post these out in a series of steps for the finance and energy sectors.

We appreciate all our subscribers and have an absolute blast working in the energy markets for you. A shout-out to Steve Reese over at Reese Energy Consulting for sponsoring the Daily Energy News Beat podcast. We need Reese Energy Consulting in the market to deliver the best U.S. natural gas and LNG exports worldwide. With the significant growth in our energy market, training is a huge issue right now and they have a great training division.

Reese Energy Consulting, Inc.

Follow Steve on his LinkedIn HERE: https://www.linkedin.com/in/steve-reese-185a86

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