Trump's Tariffs Are Driving the UK to Diversify Its Energy Trade
With the United States threatening to impose tariffs on products from several countries worldwide, many governments are looking to strengthen alternative trade links to secure their supply chains. U.S. President Donald Trump has already imposed some trade tariffs on Mexico and Canada – despite their ongoing UMSCA free trade agreement – and China and has threatened tariffs on other countries and regions, notably the European Union. This has encouraged several country leaders to explore alternative trade options, particularly when it comes to critical products such as energy.
The United Kingdom is one of the countries looking to strengthen its energy security by diversifying its trade links beyond the U.S. In 2022, U.K. imports of liquefied natural gas (LNG) rose to a record high of 25.6 billion cubic meters, marking a 74 percent increase from 2021. The U.S. provided half of these imports. In 2024, the U.K. became the top destination for U.S. LNG cargoes, as it continued to diversify its energy imports away from Russia following the 2022 Russian invasion of Ukraine and subsequent sanctions on Russian energy.
Despite having increased its imports from the U.S., President Trump is adamant that the U.K. import larger quantities of natural gas from the U.S., as the North American country continues to expand its production and export capacities. In February, Trump threatened to place tariffs on the EU but said that a deal to spare Britain “can be worked out,” ahead of U.K. Prime Minister Kier Starmer’s official visit to the White House.
This left experts wondering whether the U.K. would strike a deal to import more energy products from the U.S., particularly as Trump said that the EU may be able to avoid tariffs by purchasing more U.S. oil and gas. The former Energy Secretary and U.K. Chancellor Kwasi Kwarteng recently said, “We are going to have to get gas from somewhere if we are producing less in the North Sea.” Kwarteng added until more nuclear power comes online, “the U.S. is the natural place to go… The only other options are Qatar or Russia — and we’re not going to get it from there.”
However, the U.K. may not be putting all its eggs in one basket by solely deepening its energy trade ties with the U.S. The UK’s energy and net zero Secretary Ed Miliband traveled to Beijing this month for three days of talks with Chinese officials, with a focus on green technology supply chains, coal, and the critical minerals needed for clean energy. This reflects the Labour government’s aim to continue tackling climate change, even without the support of President Trump as he abandons several green policies established under the previous administration.
Britain’s green economy is growing three times faster than the rest of the economy. However, continued growth depends heavily on the U.K. having access to the components and materials needed to expand the country’s green energy capacity. Miliband stated, “We can only keep future generations safe from climate change if all major emitters act. It is simply an act of negligence to today’s and future generations not to engage China on how it can play its part in taking action on climate.”
The U.K. has some of the most ambitious green transition goals in the world, striving to produce as much as 95 percent of its electricity from non-hydrocarbon sources. To achieve this, the government aims to double onshore wind energy and quadruple offshore wind, as well as triple solar power, by 2030. To achieve this, the U.K. will rely heavily on China for the equipment needed to establish these wind and solar farms, as well as the lithium-ion batteries required for battery storage.
Some climate groups are pushing for the creation of a pro-climate bloc, consisting of China, the EU, and the U.K., to support a global green transition. The bloc would support developing countries in countering the influence of the U.S., Russia, Saudi Arabia and other petrostates in pushing for an expansion of fossil fuel production. The deepening of ties between the U.K. and China would mark a U-turn on the approach of the former Conservative government, which demonstrated mistrust and suspicion of Beijing, alongside the EU and the U.S.
Following the recent talks between the U.K. and China, China’s vice premier Ding Xuexiang said the Asian country is willing to work with the U.K. to deepen cooperation in financial services, trade, and investment, as well as green and low-carbon development. Ding said he expects the move will help address global challenges.
While the U.K. will likely continue to depend on the U.S. for its LNG imports for several more years, as it continues to reduce its reliance on Russia for energy, the government is also looking to diversify its energy trade options by deepening ties with China for the expansion of its green energy capacity.
By Felicity Bradstock for Oilprice.com
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