FORT COLLINS, Colo. (AP) — President Donald Trump’s initiatives to bolster the U.S. coal industry are facing significant challenges due to a notable decline in overseas sales, particularly as a result of the ongoing trade conflict with China. Recent reports from the U.S. Energy Information Administration highlighted that China has ceased importing U.S. coal, which has been a primary factor contributing to a 14% decrease in U.S. coal exports for the current year.
The disruption in trade with China has had a significant impact, as analysts suggest that China accounted for a substantial portion of U.S. coal exports in previous years. While a recent meeting between Trump and Chinese leader Xi Jinping raised hopes for potential trade progress, the extent to which the U.S. coal industry could benefit remains uncertain. Seth Feaster, a coal analyst at the Institute for Energy Economics and Financial Analysis, remarked on the ambiguity of the situation, stating, “It’s hard to tell whether that’s just going to maintain the status quo or if that’s going to be an increase in exports of coal and soybeans to China.”
In response to the challenges faced by the coal sector, Trump’s administration has taken steps to reduce regulations and open up federal lands for mining, which officials claim will help maintain energy stability and economic strength. According to Charlotte Taylor, a spokesperson for the Interior Department, these efforts are designed to “keep our lights on, our economy strong, and America Energy Dominant.” Alongside this, the administration has also lowered royalty rates for coal extracted from federal lands and has committed $625 million to enhance coal power generation, focusing on modernizing aging coal plants to meet rising electricity demands from sectors such as artificial intelligence and data centers.
Despite these initiatives, recent coal lease sales in areas like Montana, Wyoming, and Utah have not attracted acceptable bids, reflecting broader issues within the industry. Year-to-date, U.S. coal production has increased by approximately 6%, a rise attributed more to elevated natural gas prices than to Trump’s policies, according to Feaster.
From January to September of the current year, U.S. coal exports plunged by 14% compared to the same period in the prior year. The decrease can be traced back to additional tariffs imposed by China, which included a 15% tariff on U.S. coal implemented in February and a more substantial 34% reciprocal tariff that followed in April. The U.S. generally exports about 20% of its coal, with the primary destinations being India, the Netherlands, Japan, Brazil, and South Korea. While China is not a top importer of U.S. coal, its cessation of imports has greatly affected the overall export statistics.
Last year, nearly three-quarters of U.S. coal exports to China were metallurgical coal, primarily utilized in steel production, while the remainder comprised thermal coal, used for electricity generation. Most metallurgical coal originates from Appalachia, while thermal coal is sourced mainly from the vast open-pit mines in the Powder River Basin of Wyoming and Montana. Should coal exports to China resume, Appalachia would likely see the most substantial benefits.
Despite signs of optimism regarding a potential increase in coal trade with China, analysts like Andy Blumenfeld of McCloskey by OPIS caution that there is currently scant evidence to support this. The primary logistical route for coal exports to China is through the Baltimore area, with smaller volumes transiting through Norfolk, Virginia, and the Gulf of Mexico. However, the transport of thermal coal from the Western U.S. has faced barriers, including high rail shipping costs and political challenges surrounding the development of additional port facilities.
