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How energy deals could cut the U.S.–China trade deficit

gas line on Alaskan coast
Facilities for Tesoro Refinery (R) and Agrium Nitrogen Operations and Conoco Phillips LNG (L) in Kenai, Alaska. Photo: Farah Nosh/Getty Images

When President Trump demanded that China cut its $375 billion trade deficit with the U.S. by $200 billion, Chinese officials and the U.S. press shrieked. It seemed impossible. However, there's a simple way for China to give Trump this “win”: buying $200 billion worth of American oil, as well as liquefied natural gas (LNG) from Alaska, Texas and Louisiana.

The details: Alaska is estimated to have nearly $1 trillion worth of LNG that it's eager to sell and heartland states have several trillion dollars’ worth of oil and gas reserves available for export. While there would be some delays in delivery — new production and transportation infrastructure would first have to be built — the trade deficit is measured by date of sale, so the impact would be seen right away.