The latest move could potentially hurt the surging natural gas trade between the USA and China, where gas demand is growing fast and the country has already overtaken Japan to become the world's top gas importer.
If implemented, a tariff on LNG "would deal a serious blow to the US gas industry and President Trump's "energy dominance" agenda,"Hugo Brennan, senior Asia analyst at consultancy Verisk Maplecroft, told CNBC".
The trade tension between the two countries is likely to escalate further, as the United States is reviewing 10% tariffs on a further US$200 billion of Chinese goods that it might even raise to 25% after a comment period that will end on Sep 6.
As Upstream went to press, the ministry announced a 25% tariff on a $16 billion-worth of U.S. goods including crude oil.
China said on Wednesday that it will impose 25% tariffs on an additional USA $16 billion worth of American good from Aug 23.
So far, China has now either imposed or proposed tariffs on $110 billion of US goods, representing the vast majority of its annual imports of American products.
In a statement Wednesday, the Chinese Commerce Ministry charged the United States has "once again put domestic law above worldwide law by imposing "very unreasonable" new tariffs on Chinese goods". China retaliated with higher duties on a similar amount of American goods.
Escalating its tensions with Beijing, the Trump administration has also threatened to impose penalties on an additional $200 billion in Chinese exports to the United States. Beijing says it is ready to retaliate against $60 billion of American imports.
The tariffs apply to scrap plastics, paper, aluminum, ferrous metals, copper, nickel, zinc, tin and other base metals. They are meant to protect homegrown businesses and put foreign competitors at a disadvantage. Tariffs raise prices, which either comes out of business profit margins or consumer pockets, leaving less money for other things.
Shipping data shows that US LNG sales to China have already slumped to 130,000 tonnes in July from nearly 400,000 tonnes in May, while supplies from the Asia/Pacific region have increased.More news: Injury Update For Washington Redskins Rookie RB Derrius Guice
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The central bank has made it more expensive to bet against the yuan in a bid to ease pressure on the currency.
"ISRI is already hearing from contacts in China that the announcement has caused consternation among Chinese consumers of US scrap commodities", said ISRI in a statement. "Import growth is likely to slow as domestic headwinds continue to weigh on economic activity". The trade gap with the 28-nation European Union contracted by 8 percent to $11.2 billion.
Affected goods include AC and DC motors, voltage-current regulators, steam turbines, railway cars, antennas and integrated circuits.
According to a Wall Street Journal article, if the tariff threat is carried through the South Korean parliament will not ratify the US-Korea trade deal announced earlier this year.
Beijing has stepped up efforts, so far without success, to recruit governments including Germany and France as allies. So it makes sense to step back, assess where the Trump trade wars stand, and estimate how much further they could go.
While the policies have drawn loud complaints from US companies that have become reliant on imports from China, they have been forcing multinationals to rethink their supply chains and start moving them away from China. "Over time, such changes could reduce the trade deficit between the two countries and limit national security concerns, two big sources of discontent for Mr. Trump", the Times says. Longer term contract negotiations could also be affected. It would likely have to impose penalties on USA companies doing business in China to make up the difference.
However, the compromises China is considering on Made in China 2025 seem small, so far.
In the United States, a few natural gas project developers are eyeing China as a potential market to export their future LNG cargoes and some of them have already signed framework agreements with Chinese buyers.