Trump’s Tariff Pressure Can Stimulate U.S.–Asia Energy Cooperation

U.S. President Donald Trump’s Energy Dominance Council plans to host a liquified natural gas summit in Alaska on June 2, where it hopes to announce that Japan and South Korea have committed to the long-pursued Alaska LNG project to ease American gas shipments to Asia.

Since his return to the Oval Office, Trump has positioned hydrocarbons as the backbone of the U.S. energy portfolio and also as a lever for exerting America’s geopolitical influence on the global stage. The focus on Washington’s utilization of natural resources as a geopolitical tool has centered around Europe, where the U.S. helped wean its transatlantic allies off their dependence on Russian gas. Trump’s push for Asian investment in the Alaska LNG project as a way to balance the region’s trade with the U.S. amid the tariff disputes is a new test of U.S. energy diplomacy. Washington is seeking to leverage Asia’s growing demand for energy to compel renegotiations.

Is Alaskan LNG Moving Forward?

Once seen as a pipe dream hindered by challenges related to its scale, cost, and complexity, there is now renewed optimism regarding the $44 billion Alaska LNG project. The project, if built out, will move natural gas along an 800-mile pipeline from fields north of the Arctic circle to Southern Alaska and then be shipped on tankers to Asia, providing access to Alaska’s more than 120 trillion cubic feet of natural gas and the logistical benefit of avoiding the Panama Canal, reducing bottlenecks and drastically decreasing shipment times.

Following President Trump’s suggestion that trade partners can avoid tariffs by increasing their purchases of U.S. energy, Treasury Secretary Scott Bessent confirmed that investments from Japan, South Korea, and Taiwan in the flagship LNG project could form the basis of a deal with those countries. If Trump’s reciprocal tariffs are implemented, Japan, South Korea, and Taiwan would face 24%, 25%, and 32% tariffs, respectively.

Japan’s biggest electricity producer and gas buyer, Jera, is considering participating as part of its effort to negotiate a trade deal with the U.S., while officials from South Korea are expected to visit Alaska to discuss the project in the coming weeks. These developments follow announcements in March that Taiwanese state energy company CPC signed a nonbinding agreement with the state-run Alaska Gasline Development Group to buy U.S. LNG and invest in the project.

Asia’s Growing Energy Need

In addition to East Asia, U.S. tariff negotiations have brought several countries in Southeast and South Asia to the table, all of which are eager to purchase energy to reduce their trade surpluses with the U.S.

There’s a strong convergence of interests on all sides, especially from Asia. With electricity demand in Southeast Asia growing at an annual rate of 4% and a heavy reliance on maritime oil and gas imports through the Strait of Malacca, Indo-Pacific energy security stands to benefit greatly from increased trade with the U.S.

Since the onset of negotiations, several countries have started to explore the possibility of buying American energy. Bangladesh signed an agreement with Louisiana-based Argent LNG for up to five million tons per year, Indonesia has offered to buy $10 billion of additional U.S. energy goods, and Vietnam announced provisional deals for the import of U.S. energy projects to avoid tariffs. Some countries have taken measures aside from increasing their purchases of American energy products. For example, India is weighing the option to scrap its import tax on American LNG in addition to boosting U.S. oil imports, and Thailand pledged to buy more U.S. energy commodities and reduce import tariff rates on LNG and ethanol

With China’s suspension of U.S. LNG imports and Italian energy giant ENI’s CEO Cristian Signoretto’s cautionary comments on the competitiveness of American LNG as the U.S. imposes tariffs, Washington is angling to find new customers as it streamlines regulations, works to increase efficiency, and cut costs for natural gas export projects along the Gulf Coast.

How Energy Fits into the U.S Multilateral Approach to Asia

The Trump Administration’s attempt to corral Taiwan, Japan, and South Korea into making significant investments in the Alaska LNG project signals a continuation of its departure from the U.S.’s historical “hubs and spokes” alliance system in Asia.

In addition to bilateral contacts between the U.S. and its Asian partners, Washington is no longer limiting its collective engagement in Asia to defense and security. Asian countries recognize the increasing importance of regional energy security, and the U.S.’s energy-focused outreach is striking a chord. Trump’s use of energy in his carrot-and-stick approach reveals the mutual benefit of increased energy cooperation for all parties, given the region’s growing energy demand.

Without the resources to be self-sufficient, Asia must rely on LNG imports to meet its energy demands, and the U.S is taking advantage of the opportunity to supply. Whether this will be sufficient to counterbalance U.S. trade deficits remains to be seen: Japan and Korea had $66 billion deficits in 2024, while Taiwan’s amounted to $74 billion. The Trump Administration has its work cut out for it.