China is proposing a 25 per cent tariff on imports of U.S. liquefied natural gas as retaliation for the Trump administration’s latest push to increase tariffs on the Asian giant. The shares of America’s largest gas exporter, Cheniere Energy Inc., fell on the report.

Such a move would be a major blow for America’s emerging business to export the chilled fuel abroad, a key outlet needed for shale supplies growing at a record clip this year. It’s the first time the fuel has been ensnared by the expanding trade war, and comes as Russia plans to begin pumping gas to China through its newly-built 2,500-mile (4,000 kilometre) Power of Siberia pipeline by the end of 2019.

Billions of U.S. dollars may hang in the balance as Cheniere, Tellurian Inc. and other developers have been courting utilities and state-backed companies in the Asian country to justify construction of more terminals to ship the super-chilled form of natural gas.

“At least in the short term any Chinese buyer looking for long term supply would have to drag their feet on signing a U.S. contract,” Jason Feer, head of business intelligence at Poten & Partners Inc. in Houston, said by telephone.

China accounted for 13 per cent of the exports from Cheniere’s Sabine Pass terminal in Louisiana as of mid-June, based on ship-tracking data compiled by Bloomberg. The Houston-based company dropped as much as 7.7 per cent after the report, the biggest one-day per centage decline since 2016.

Cheniere didn’t immediately respond to a request seeking comment. The company recently gave the green light to expand its Texas export terminal thanks in part to a contract it signed earlier this year with China National Petroleum Corp., according to a company statement.

Earlier this year, China emerged as the world’s biggest importer of natural gas, topping Japan, as it aggressively moves to reduce its reliance on smog-inducing coal.

With China’s traditional suppliers in Central Asia unable to keep up with demand during the recent winter, Cheniere moved to help fill the gap. Since 2016, when its Sabine Pass export terminal opened in Louisiana, Cheniere had shipped about 50 supertankers filled with the super-chilled fuel to China as of the end of June, with the majority of it moving after the cold weather kicked in.

Warren Patterson, commodity strategist for ING Bank NV, said he was “quite surprised” to see LNG show up on China’s list.

“Given the transition we are seeing in China, with a move away from coal towards natural gas, I would have thought that the government would have wanted to ensure adequate supply,” Patterson said in an email.

Gas exports overall to China jumped 17 per cent last year to 92 billion cubic meters, and they’re poised to hit 200 billion by 2025, according to Massimo Di Odoardo, vice president of global gas and LNG at Wood Mackenzie Ltd. in London.