A US China LNG deal is back on the table. Xi Jinping arrives in Washington on September 24, and the two sides are expected to discuss reviving a $6 billion a year trade in American liquefied natural gas, a trade that has effectively collapsed since Beijing imposed a 15% tariff on US LNG in early 2025. For currency traders, this is not just an energy story. It touches the dollar, the yuan, and every currency pair linked to global gas flows.
What Actually Happened
Beijing’s 15% tariff on US LNG, imposed in February 2025 just days into Trump’s second term, cut recorded US LNG shipments to China from 64 vessels in 2024 to zero in 2025. None of the underlying long-term contracts were canceled. Chinese buyers kept honoring them but resold the cargoes into Europe and Asia instead of paying the tariff to bring them home.
China filled the gap elsewhere. From January through July, Australia supplied 36% of China’s LNG imports, Southeast Asia 20%, Russia 12%, and Canada, a new entrant to the trade, 4%. American cargoes made up just 0.2%. That is a dramatic reversal from 2021, when US cargoes were 12% of China’s total LNG imports, worth $6.2 billion that year.
The backdrop matters too. Iranian missiles struck Qatar’s Ras Laffan Industrial City on March 18-19, destroying two of Qatar’s 14 LNG production trains and knocking out roughly 17% of its export capacity, at an estimated cost of $20 billion a year in lost revenue, with repairs expected to take up to five years. That loss forced China, and everyone else, to scramble for alternative suppliers, which is part of why a US China LNG deal now looks more urgent to Washington than to Beijing.
Which Currencies Move on a US China LNG Deal
If it results in the tariff being lifted, this would reopen a market Washington needs more than China does. China has already diversified its supply and its overall LNG demand outlook has weakened, so the leverage sits with Beijing. That asymmetry is itself a signal for the yuan: a country that no longer depends on a supplier has less incentive to concede on currency or trade terms elsewhere in the relationship.
Watch USD/CNH first. Any concrete announcement tends to firm sentiment toward the yuan, since it signals a broader thaw in trade friction rather than just an energy-specific fix. AUD/USD and USD/CAD are also exposed, since Australia and Canada have become substitute suppliers to China. If US cargoes start flowing again, that substitution slows, which is a modest headwind for the Australian and Canadian dollars versus a US LNG revival. The dollar itself has a more mixed reaction: reopening a $6 billion a year export market is a marginal positive for the US trade balance, but currency markets will care more about whether this signals de-escalation across the wider US China relationship, which touches tariffs on far more than gas.
Gas-exposed currencies elsewhere in the system are worth watching too. Qatar’s lost export capacity has already reshaped global LNG flows, a dynamic covered in Hormuz Oil Shock Currencies: What Traders Need to Watch Now, and any shift in US-China gas trade adds another variable to that reshuffling.
Who Benefits and Who Loses
US LNG exporters are the clearest winners if the tariff comes off, regaining access to a market that was worth $6.2 billion at its 2021 peak. Washington needs this US China LNG deal more than Beijing does precisely because China has proven it can source gas from Australia, Southeast Asia, Russia and Canada without much strain, while US producers have had zero vessels bound for China in 2025 against 64 the year before.
Qatar is a loser either way. Its LNG capacity is still down 17% after the March strikes on Ras Laffan, and a revived US-China trade does nothing to fix that, though it does mean Qatar faces more competition for the buyers it hasn’t lost. Australia, Southeast Asia, Russia and Canada, the suppliers that stepped into China’s gap, stand to lose market share if American cargoes return, which is the main channel through which this story reaches AUD and CAD.
What This Means for You
A US China LNG deal is a headline event, but the practical impact on household budgets is more about direction than magnitude. If the tariff is lifted, it does not immediately lower gas prices for anyone outside the US-China trade lane, since the volumes involved are a fraction of global LNG demand and Qatar’s capacity is still impaired. What it can do is nudge sentiment: a thaw in US-China trade friction tends to support risk appetite broadly, which can mean a softer dollar and firmer commodity-linked currencies like the Australian and Canadian dollar in the short run, before the supply substitution effects, AUD and CAD losing a customer, work the other way.
If you hold savings in AUD, CAD, or CNH, or you are watching mortgage and loan rates tied to central bank policy, the thing to track is not the gas price itself but whether the deal actually removes the 15% tariff or just gets discussed. Announcements without concrete tariff removal tend to fade quickly. If you travel or do business with China, a genuine reopening of this trade lane is one small data point suggesting the broader US-China relationship is cooling down rather than escalating, which historically has supported more stable currency conditions than a tariff standoff does.
Risks to This View
The biggest risk is that talks produce a symbolic US China LNG deal without the tariff actually being removed. Beijing’s incentive to concede is limited exactly because its LNG demand outlook has weakened and its diversification away from the US has already happened. A deal that is more optics than substance would leave USD/CNH and the commodity currencies largely where they started.
There is also the unresolved Qatar problem. With repairs to Ras Laffan potentially taking up to five years, global LNG supply stays tighter than before the March strikes regardless of what Washington and Beijing agree on, a dynamic also relevant to the dollar’s broader risk premium discussed in Dollar Weakness Risk Premium: Why This Yield Rally Won’t Save the Greenback. Add to that the possibility that China uses the LNG discussion as a bargaining chip for concessions elsewhere, in which case the currency impact could run through broader trade headlines rather than gas volumes specifically, a pattern similar to what happened with India Russian Oil Tariffs Could Hit Your Rupee Savings when tariff politics moved a currency more than the underlying trade did.
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This article is market analysis and commentary, not financial advice.
I’m Vinit Makol. With 20+ years in forex and financial markets, I serve as lead analyst at Edge-Forex, covering currency markets, macroeconomics, trading strategies, and market-moving events to give traders practical insights they can actually use.