WASHINGTON (Reuters) - A scheduled trip to West Virginia by executives from China Energy Investment Corp to discuss a planned $83.7 billion investment in the state has been canceled, the latest victim of a growing trade war between the United States and China.
The investment by China Energy, which ranks among the world’s largest power companies by asset value, was the biggest among a slew of deals signed during U.S. President Donald Trump’s state visit to Beijing in November. The total value of the deals could be as much as $250 billion.
Brian Anderson, director of the West Virginia University Energy Institute, told Reuters on Wednesday the executives were due to arrive in West Virginia last weekend to discuss where to invest in shale gas, power and petrochemical projects.
“The original plan was for the CEO of China Energy and a delegation to arrive over this past weekend and be here in West Virginia with our state officials and others,” said Anderson.
“But that visit was canceled because it would be inappropriate in the midst of this trade dispute for China to come,” he said.
China Energy could not immediately be reached for comment.
Among planned stopovers by the delegation was an appearance at the Northeast U.S. Petrochemical Construction Conference in Pittsburgh on Tuesday.
The gas and power agreement signed as part of Trump’s Beijing visit marked the first overseas investment for newly founded China Energy, which formed from a merger of China Shenhua Group [SHGRP.UL], the country’s largest coal producer and China Guodian Corp [CNGUO.UL], one of its top five utilities.
The Trump administration announced $50 million in tariffs on Chinese goods last week. In return, China retaliated with tariffs on U.S. exports and threatened to impose more duties on U.S. energy exports.
China’s investment would be a game changer for West Virginia, which had an annual Gross State Product of less than $83 billion last year.
West Virginia Governor Jim Justice, a Trump ally, has said the investment deal would boost his economically ailing state’s natural gas and petrochemical industries and create jobs.
Trump made West Virginia and its coal miners a centerpiece of his presidential campaign, promising to create jobs for laid-off miners, revive the coal industry and boost its sagging economy.
Justice declined to comment on whether he was concerned that trade frictions jeopardized the China Energy investment, but Anderson said the governor had been in regular contact with Trump.
Among the investments under consideration is an Appalachian Storage and Trading Hub for hydrocarbons, such as ethane and butane, as well as two power plants in the state.
West Virginia’s Chamber of Commerce and coal association are watching Washington-Beijing developments with concern.
Mark Drennan, a Republican senator in the West Virginia state legislature, said the promised investment was likely being used by China to gain leverage in the trade dispute.
“They’ve spent a lot of time and effort in West Virginia,” he said of China Energy. “I would hope it (the trip) would be rescheduled.”
Anderson, who has been coordinating visits from Chinese delegations, said he was optimistic that the trade row would eventually be seen as little more than one of many “speed bumps” along the way of an investment deal that would extend over a 20-year period.
Reporting by Diane Bartz and Valerie Volcovici; Editing by Chris Sanders and Tom Brown
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