LNG and Tungsten: The Commodities Caught in the US-China Trade War Crossfire

As the US-China trade war intensifies, two commodities find themselves at the center of the storm: Liquefied Natural Gas (LNG) and tungsten. These critical resources, once the backbone of bilateral trade, are now entangled in a web of tariffs and export controls, presenting both opportunities and challenges for investors. Let's delve into the intricacies of this geopolitical tug-of-war and explore the potential implications for the global LNG and tungsten markets.

Liquefied Natural Gas (LNG): A Double-Edged Sword

The US, now the world's largest LNG exporter, has seen its exports to China dwindle in the face of retaliatory tariffs. In 2024, China imported nearly 6% of total US LNG exports, amounting to approximately 4.3 million metric tonnes (LSEG data). Chinese state-owned companies have signed LNG supply deals for over 20 million metric tonnes per annum (MTPA) from both existing and future US export terminals (Reuters calculations).

However, the trade war has led to retaliatory tariffs on US LNG exports by China, which could disrupt long-term contracting and offtake agreements, making it more difficult for new US LNG projects to progress (EBW Analytics, 2025). This uncertainty weakens America's competitive position in global LNG markets, potentially benefiting other LNG exporters like Australia, Qatar, and Russia.

Investors in US LNG projects and companies may face increased risks and uncertainty, affecting their investment decisions and the overall investment landscape for LNG. To mitigate these effects, LNG exporters can diversify their export markets, secure long-term contracts, explore alternative financing options, and optimize operational efficiency.

Tungsten: A Critical Mineral in Short Supply

China's export controls on tungsten, along with other critical metals like tellurium, bismuth, indium, and molybdenum, could disrupt global supply chains and create vulnerabilities for US industries reliant on these resources (USGS, 2025). The US ceased mining tungsten in 2015 and has not produced refined bismuth since 1997, relying entirely on imports for both materials (USGS, 2025). Despite a declining share of tungsten imports from China, the country remains the primary supplier, making any sudden disruptions potentially damaging to US industries.

The US tariffs on indium and tungsten have already driven American importers to diversify their supply chains, but vulnerabilities remain, particularly for tungsten (USGS, 2025). The geopolitical implications of these export controls could lead to increased investment in alternative sources of tungsten and other critical metals, as well as efforts to develop domestic production capabilities.

Investors in the tungsten market may need to reassess their strategies and consider the potential impacts of geopolitical risks on supply chains and pricing dynamics.

Navigating the Geopolitical Minefield

The US-China trade war has significant geopolitical implications for the global LNG and tungsten markets, which can impact the investment landscape for these commodities. Investors should consider the potential disruptions to supply chains, changes in pricing dynamics, and the increased risks and uncertainties associated with these geopolitical tensions when making investment decisions.

By staying informed about the evolving trade dynamics and maintaining a diversified investment portfolio, investors can better navigate the geopolitical minefield and capitalize on the opportunities presented by the US-China trade war.