Asian LNG Shift Driven by US Trade Pressure Poses Climate, Energy Risks
HANOI: In a bid to ease trade tensions with the Trump administration and avoid steeper tariffs, several Asian countries are offering to boost purchases of U.S. liquefied natural gas (LNG). However, analysts warn that this strategy could derail their long-term climate goals and compromise energy security.
Increasing imports of U.S. LNG has become a key bargaining chip in negotiations over President Donald Trump’s aggressive tariff policies. Vietnam’s Prime Minister recently emphasized the need to secure more LNG supplies in a government meeting, following the country’s deal in May with an American firm to develop a gas import terminal. Japan’s largest power utility, JERA, also signed 20-year contracts to purchase up to 5.5 million metric tons of U.S. gas annually starting around 2030.
While U.S. efforts to promote LNG exports to Asia began before Trump took office, they have accelerated under his administration’s hardline trade stance. The president has positioned large projects—like the $44 billion Alaska LNG venture—as vehicles to strengthen energy ties with Asia. South Korean officials visited the project site in June, and Thailand has expressed interest in a long-term fuel deal tied to the same pipeline, which would span 1,300 kilometers from Alaska’s North Slope to the coast. The Philippines and India are also exploring LNG purchases, with India considering the removal of import duties on U.S. energy to reduce its trade surplus with Washington.
“Trump has leaned hard on many Asian trade partners to buy more U.S. LNG,” said Tim Daiss of APAC Energy Consultancy. “Even Japan, already oversupplied, is buying more—despite cancelling contracts and offloading excess gas to other Asian markets. It’s not a win for Southeast Asia’s sustainability goals.”
LNG Deals Threaten Renewable Energy Progress
Experts caution that locking into decades-long LNG supply agreements could slow the region’s shift to renewable energy. According to Indra Overland of the Norwegian Institute of International Affairs, infrastructure built for gas—such as pipelines and power plants—becomes difficult and costly to replace, potentially delaying the transition to cleaner energy options like solar and wind, which are now cheaper and faster to deploy.
He warned that these investments risk becoming stranded assets in a rapidly changing energy landscape. “Once you’re committed, it’s hard to shift,” Overland said.
Energy companies with deep ties to fossil fuels also influence national policies in ways that reinforce dependence on gas and coal. And while LNG burns cleaner than coal, it still emits greenhouse gases and contributes to global warming.
Many contracts include “take-or-pay” clauses, obligating countries to purchase the fuel even if it’s not needed. Christopher Doleman of the Institute for Energy Economics and Financial Analysis warned that as renewable energy scales up and demand for gas drops, countries may still face costs for unused LNG.
Pakistan’s experience offers a cautionary tale: faced with rising LNG prices, consumers turned to rooftop solar, cutting grid demand. Now, with excess LNG on hand, the country is postponing shipments and trying to resell surplus fuel.
LNG Imports Unlikely to Shift Trade Balance
While Asian nations are signaling interest in U.S. LNG, experts doubt it will significantly impact America’s trade deficits. According to Doleman, South Korea would need to import 121 million metric tons of LNG annually—half again as much as the total U.S. exported worldwide last year, and triple Korea’s own current imports. Vietnam would have to buy even more to balance its trade surplus with the U.S.
Cost competitiveness is another hurdle. The Alaska LNG project is seen as uneconomical, with U.S. gas prices needing to fall by more than 50% to compete with cheap coal and renewables in Asia. U.S. tariffs on Chinese steel could further inflate the cost of constructing necessary LNG infrastructure, and delays in turbine manufacturing mean new gas power plants might not be operational until 2032.
Additionally, a global supply glut is pushing LNG prices downward, making it increasingly difficult for countries to justify locking into long-term contracts at today’s prices.
Energy Security Risks Grow with Long-Term US Dependence
Analysts also question the wisdom of tying long-term energy security to a single, politically unpredictable supplier like the U.S.
“The U.S. isn’t exactly a stable trade partner,” Overland noted. “Relying on American energy exports is a risky bet.”
LNG contributes to energy security only when it’s reliably affordable and accessible, said Dario Kenner of Zero Carbon Analytics. Recent events underscore the volatility of global energy markets: shipments intended for Asia were diverted to Europe during the war in Ukraine, as buyers there outbid Asian nations like Bangladesh and Sri Lanka—despite existing contracts.
“Even distant geopolitical events can ripple across Asia, driving up prices and limiting supply,” Kenner said.
He argued that the region would be better served by investing in renewables, where vast untapped potential exists. Currently, only about 1% of Southeast Asia’s solar and wind resources are being used.
“There are real alternatives to meet growing power demand,” he said. “It doesn’t have to be LNG.”
