What the election of Donald Trump means for Asia-Pacific energy
Trump's return will have implications for APAC energy markets
Georgia Edmonstone
Wright, Burgum & Trump. | Credits: Shutterstock.
21 November 2024
The return of Donald Trump to the White House promises to reshape U.S. energy policy, with significant implications for Asia-Pacific markets. With plans to boost oil and LNG exports while rolling back climate-focused regulations, Georgia Edmonstone, Research Associate, Economic Security United States Studies Centre at the University of Sydney, argues Trump's energy agenda could bolster fossil fuel dominance—but risks trade tensions and a slower global energy transition. The stakes for the region are high.
The United States plays an increasingly important role in Asia-Pacific energy markets as a major exporter of liquified natural gas (LNG) and the world's largest of oil. The election of Donald Trump has implications for US energy policy that will impact Asia-Pacific energy markets. The Trump administration's energy policy priorities are taking shape with recent announcements of Doug Burgum as Trump's pick for Secretary of the Interior and Chris Wright for Secretary of Energy.
During the election campaign, energy emerged as a central issue, with both candidates addressing voters' concerns about rising costs and the need to uphold the United States' status as a global energy leader. President-elect Donald Trump positioned himself as the "American energy president," championing increased energy production and chanting "drill, baby drill" at rallies.
The triumphant Trump administration is expected to prioritise boosting U.S. LNG and oil production and exports as Trump prepares to enter the White House at the start of next year for his second term as President of the United States. His party's policy platform is for the U.S. to become the "number one producer of oil and natural gas in the world". An increasingly large share of American LNG exports are destined for Asia, meaning any changes to US export capacity will impact Asia-Pacific markets. Trump has promised to reverse the Biden-Harris administration's decision to pause granting new LNG export licenses to countries without free trade agreements (a decision driven by the administration's decarbonisation goals). Trump would likely repeal environmental and emissions standard regulations that limit oil and gas production. He could lease more federal lands and water for oil and gas development, reversing current Biden administration policy (albeit only a small fraction of extraction occurs on federal land). If the U.S. does expand its LNG exports, this could have implications for other LNG-exporting nations in the Asia-Pacific like Australia.
While Trump wants to encourage energy exports, he is not as keen on imports. Trump has promised tariffs of at least 10 % on all countries and 60 % on China. The U.S. only imports a small amount of its energy, such as diesel, from Asia-Pacific countries, but it is a major exporter of oil to the region. If these tariffs come to fruition, we can expect US trade partners to retaliate, potentially targeting US energy exports. We've already seen this previously, such as in 2018 when China reacted to Trump's tariffs with retaliatory tariffs on US energy exports.
A tit-for-tat trade war could alter trade in the Asia-Pacific region, potentially opening up new market opportunities for competitors.
Support for renewables versus fossil fuels was another big choice on the ballot. Voters had to consider how a Trump administration could slow the pace of the US energy transition. Trump has opposed the Inflation Reduction Act (IRA) which funds the manufacture, innovation, and deployment of renewable energy. However, his ability to repeal the act if elected will be limited and would require Congressional support. Eighteen Republican House members signed a letter opposing repealing or reforming the IRA, and many Republican districts and states have benefited from the IRA's manufacturing investments. However, Trump could tweak the requirements to receive IRA tax credits or rescind unspent IRA funds, which could slow demand for clean energy products like electric vehicles globally.
With Trump in the White House, the global renewable energy landscape will likely feel significant ripple effects. The Trump administration is expected to scale back U.S. support for global decarbonisation efforts, exemplified by actions like withdrawing from the Paris Agreement.
Trump has picked Chris Wright, an entrepreneur in the fracking industry, for his Secretary of Energy. Wright is a proponent of energy abundance, favouring fossil fuels and nuclear but more sceptical of renewable energy. Doug Burgum, Governor of oil and gas-producing North Dakota, has also been tipped as the future Secretary of the Interior (who is responsible for managing public lands and natural resources) and leader of a new National Energy Council. Burgum is an advocate for oil and gas but also carbon capture technology and hydrogen. While the two nominations will need to be confirmed by the Senate before joining cabinet, Trump's picks signal a focus on increasing energy production across all sources (including fossil fuels) including permitting reform and deregulation.
The future Trump administration is likely to tweak domestic policies to increase oil and gas production but the impact on Asia-Pacific trade from these policies could be offset by a potential trade war. A Trump administration could also slow the pace of the global energy transition. With the energy priorities of the future Trump administration becoming clearer, the focus will turn to how and whether his priorities can be implemented and what effect they will have on global markets.
About Georgia Edmonstone
Georgia Edmonstone. | Credits: United States Studies Centre.
Georgia Edmonstone is a Research Associate in Economic Security at the United States Studies Centre, University of Sydney. Her work focuses on the intersection of economic policy, trade, and security in the Indo-Pacific region, providing critical insights into U.S.-Australia relations. With a background in economics, Georgia has contributed to publications and policy analyses that inform decision-makers on strategic economic challenges. Known for her meticulous research and policy expertise, she plays a pivotal role in advancing understanding of the economic dimensions of national security. Georgia holds a degree in international studies and is passionate about fostering global economic stability.
A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.
A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.
OPINION
What the election of Donald Trump means for Asia-Pacific energy
Trump's return will have implications for APAC energy markets
Wright, Burgum & Trump. | Credits: Shutterstock.
The return of Donald Trump to the White House promises to reshape U.S. energy policy, with significant implications for Asia-Pacific markets. With plans to boost oil and LNG exports while rolling back climate-focused regulations, Georgia Edmonstone, Research Associate, Economic Security United States Studies Centre at the University of Sydney, argues Trump's energy agenda could bolster fossil fuel dominance—but risks trade tensions and a slower global energy transition. The stakes for the region are high.
The United States plays an increasingly important role in Asia-Pacific energy markets as a major exporter of liquified natural gas (LNG) and the world's largest of oil. The election of Donald Trump has implications for US energy policy that will impact Asia-Pacific energy markets. The Trump administration's energy policy priorities are taking shape with recent announcements of Doug Burgum as Trump's pick for Secretary of the Interior and Chris Wright for Secretary of Energy.
During the election campaign, energy emerged as a central issue, with both candidates addressing voters' concerns about rising costs and the need to uphold the United States' status as a global energy leader. President-elect Donald Trump positioned himself as the "American energy president," championing increased energy production and chanting "drill, baby drill" at rallies.
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The triumphant Trump administration is expected to prioritise boosting U.S. LNG and oil production and exports as Trump prepares to enter the White House at the start of next year for his second term as President of the United States. His party's policy platform is for the U.S. to become the "number one producer of oil and natural gas in the world". An increasingly large share of American LNG exports are destined for Asia, meaning any changes to US export capacity will impact Asia-Pacific markets. Trump has promised to reverse the Biden-Harris administration's decision to pause granting new LNG export licenses to countries without free trade agreements (a decision driven by the administration's decarbonisation goals). Trump would likely repeal environmental and emissions standard regulations that limit oil and gas production. He could lease more federal lands and water for oil and gas development, reversing current Biden administration policy (albeit only a small fraction of extraction occurs on federal land). If the U.S. does expand its LNG exports, this could have implications for other LNG-exporting nations in the Asia-Pacific like Australia.
While Trump wants to encourage energy exports, he is not as keen on imports. Trump has promised tariffs of at least 10 % on all countries and 60 % on China. The U.S. only imports a small amount of its energy, such as diesel, from Asia-Pacific countries, but it is a major exporter of oil to the region. If these tariffs come to fruition, we can expect US trade partners to retaliate, potentially targeting US energy exports. We've already seen this previously, such as in 2018 when China reacted to Trump's tariffs with retaliatory tariffs on US energy exports.
A tit-for-tat trade war could alter trade in the Asia-Pacific region, potentially opening up new market opportunities for competitors.
Support for renewables versus fossil fuels was another big choice on the ballot. Voters had to consider how a Trump administration could slow the pace of the US energy transition. Trump has opposed the Inflation Reduction Act (IRA) which funds the manufacture, innovation, and deployment of renewable energy. However, his ability to repeal the act if elected will be limited and would require Congressional support. Eighteen Republican House members signed a letter opposing repealing or reforming the IRA, and many Republican districts and states have benefited from the IRA's manufacturing investments. However, Trump could tweak the requirements to receive IRA tax credits or rescind unspent IRA funds, which could slow demand for clean energy products like electric vehicles globally.
With Trump in the White House, the global renewable energy landscape will likely feel significant ripple effects. The Trump administration is expected to scale back U.S. support for global decarbonisation efforts, exemplified by actions like withdrawing from the Paris Agreement.
Trump has picked Chris Wright, an entrepreneur in the fracking industry, for his Secretary of Energy. Wright is a proponent of energy abundance, favouring fossil fuels and nuclear but more sceptical of renewable energy. Doug Burgum, Governor of oil and gas-producing North Dakota, has also been tipped as the future Secretary of the Interior (who is responsible for managing public lands and natural resources) and leader of a new National Energy Council. Burgum is an advocate for oil and gas but also carbon capture technology and hydrogen. While the two nominations will need to be confirmed by the Senate before joining cabinet, Trump's picks signal a focus on increasing energy production across all sources (including fossil fuels) including permitting reform and deregulation.
The future Trump administration is likely to tweak domestic policies to increase oil and gas production but the impact on Asia-Pacific trade from these policies could be offset by a potential trade war. A Trump administration could also slow the pace of the global energy transition. With the energy priorities of the future Trump administration becoming clearer, the focus will turn to how and whether his priorities can be implemented and what effect they will have on global markets.
About Georgia Edmonstone
Georgia Edmonstone is a Research Associate in Economic Security at the United States Studies Centre, University of Sydney. Her work focuses on the intersection of economic policy, trade, and security in the Indo-Pacific region, providing critical insights into U.S.-Australia relations. With a background in economics, Georgia has contributed to publications and policy analyses that inform decision-makers on strategic economic challenges. Known for her meticulous research and policy expertise, she plays a pivotal role in advancing understanding of the economic dimensions of national security. Georgia holds a degree in international studies and is passionate about fostering global economic stability.
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