UK diversifies energy trade due to US tariffs

The United Kingdom is adjusting its energy trade strategy due to potential U.S. tariffs. President Donald Trump has discussed tariffs affecting several countries, including those in the European Union. This situation is pushing countries, like the U.K., to explore new trade connections for securing their energy supplies. In 2022, U.K. imports of liquefied natural gas (LNG) hit a record high, largely supplied by the U.S. However, the U.K. is keen to reduce its reliance on U.S. energy as it has already started moving away from Russian imports following the Ukraine crisis. Despite Trump's insistence on increasing U.K. imports from the U.S., discussions about tariffs with the EU have prompted speculation on a possible energy deal. Former U.K. Energy Secretary Kwasi Kwarteng emphasized the need for alternative gas sources. With declining production in the North Sea, he indicated that the U.S. would be the primary supplier until more nuclear power comes online. Nonetheless, the U.K. is also actively engaging with China to strengthen trade ties, particularly in green technology and clean energy resources. U.K. Energy and Net Zero Secretary Ed Miliband recently visited Beijing to discuss cooperation in tackling climate change. The U.K. aims to produce 95% of its electricity from non-hydrocarbon sources by 2030, relying on equipment and materials from China for renewable energy projects. There are suggestions for a coalition of the U.K., EU, and China to support a global green transition. China is open to working with the U.K. in various sectors, indicating a shift from the previous Conservative government’s cautious stance towards Beijing. While the U.K. will still depend on U.S. LNG in the near term, it is also broadening its energy trade relationships to enhance its energy security and green energy ambitions.