Coal May Become Hostage in Trump’s Trade War - Global Trade Magazine
  June 28th, 2018 | Written by

Coal May Become Hostage in Trump’s Trade War

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  • US metallurgical coal exports to China have been surging.
  • A week before Trump hit China with new tariffs, China was about to increase its imports of US met coal.
  • Trump has slapped tariffs on Chinese imports and has quadrupled down on that move in the face of Chinese retaliation.

Against all odds, United States coal exports have increased since President Donald Trump took office a year and a half ago. A good chunk of that increase has gone to China, even thought that country, like others, is moving away from using coal to generate electricity.

Instead US exports to China have been surging in the category of metallurgical coal, or “met coal,” which the Chinese use to produce steel.

Just a week before the president announced new tariffs on Chinese imports, reports indicated that China was about to increase substantially its imports of US met coal. But now that Trump has slapped tariffs on Chinese imports and has quadrupled down on that move in the face of Chinese retaliation, coal producers are less confident of their fortunes. The Chinese have targeted their retaliatory tariffs on rural areas, those that tend to support Trump politically, and that includes coal country.

According to reporting in the Washington Post, coal producers aren’t yet running scared, but they’re certainly concerned.

It’s an object lesson in the ebbs and flows of international trade. Trump wants other countries to buy more US exports, but he imposes new tariffs on their products, the consequences of which are a blow to the competitiveness of US products.

Trump promised on the campaign trail to bring back US coal. Many were skeptical of that position, yet the  coal industry has thrived under the current administration. But thanks to the president’s penchant for trade wars, that state of affairs may not last for very much longer. And that’s true not only for coal, but for other US commodities and products as well.