The Hindu: Published on 19th July 2025:
Why in News?
Asian countries are increasingly offering to buy more U.S. liquefied natural gas (LNG) as part of their trade negotiations with the Trump administration. These offers are aimed at reducing trade deficits and avoiding higher tariffs imposed by the U.S. government. This strategy, however, raises concerns regarding long-term climate goals and regional energy security.
Key Stakeholders Involved:
The primary stakeholders in this development include the U.S. administration under President Trump, Asian countries such as Japan, India, Vietnam, Thailand, and the Philippines, as well as energy companies like JERA (Japan’s largest power generator). Climate experts and energy policy analysts are also deeply engaged due to the environmental implications of LNG imports.
What’s at Stake?
Trade Relations:
Buying U.S. LNG is being used by Asian countries as a negotiation tool to improve trade ties with the United States. This approach is being used to prevent further imposition of tariffs on goods by President Trump, who has made reducing the U.S. trade deficit a key policy focus.
Climate Commitments:
Locking into long-term LNG contracts threatens to derail the progress these nations are making towards renewable energy and emission reduction targets. LNG, though cleaner than coal, still contributes to greenhouse gas emissions.
Energy Security:
Depending heavily on imported U.S. LNG raises concerns over energy security, especially in volatile global energy markets. If demand falls or renewable energy becomes cheaper, countries might still be bound by “take-or-pay” contracts, which obligate them to pay for gas even if it isn’t used.
Long-term Implications:
Geopolitical Impact:
These energy deals are being used as bargaining tools in trade discussions. However, experts suggest that even large-scale LNG purchases may not significantly reduce the overall U.S. trade deficit. The $44 billion Alaska LNG project, heavily promoted by Trump, is seen as commercially unviable by many analysts.
Environmental Consequences:
Investing in LNG infrastructure like pipelines, terminals, and gas-powered stoves can create a long-term dependence on fossil fuels. This makes it more difficult and expensive to switch to renewable sources in the future, thereby slowing down the transition to sustainable energy.
Economic Burden:
Countries may face financial burdens due to binding contracts. For example, Pakistan, having signed long-term LNG deals, is now deferring shipments and facing rising energy costs while citizens are turning to rooftop solar. This demonstrates the economic risks of overcommitting to LNG.
Expert Insights:
Energy consultant Tim Daiss stated that countries like Japan are buying more U.S. LNG despite already having excess supply, purely under trade pressure. Indra Overland of the Norwegian Institute of International Affairs warned that such deals could trap countries in outdated energy systems, making it hard to adopt renewables. Christopher Doleman from the Institute for Energy Economics and Financial Analysis noted that countries might have to pay for gas they don’t even use due to take-or-pay clauses.
Country-Specific Moves:
Japan has signed a 20-year deal to buy up to 5.5 million metric tons of LNG annually from the U.S. starting in 2030. Vietnam has signed a deal to develop a U.S.-based gas import terminal. India is exploring the removal of import duties on American energy shipments. Thailand has shown interest in the Alaska LNG pipeline, and the Philippines is considering imports from the same project.
Conclusion:
While increasing U.S. LNG imports might serve short-term diplomatic and trade goals, experts warn that such strategies may compromise long-term climate policies, economic flexibility, and energy security in Asia. The push by the Trump administration to link trade deficits with LNG exports could backfire if countries get locked into fossil fuel infrastructure while the global energy market continues to evolve rapidly towards cleaner alternatives.
