February 13, 2025 - It’s too early to tell what impact tariffs on coal exports will have on West Virginia, the state’s deputy revenue secretary said Tuesday.

Following President Donald Trump’s recently imposed tariffs on imports from China, China retaliated with a range of tariffs, including a 15% tariff on coal and liquefied natural gas imports from the U.S.

“Coal exports to China are up and down from year to year,” Deputy Revenue Secretary Mark Muchow said during testimony to the West Virginia Legislature’s Joint Committee on Government and Finance. “We tend to have more consistent coal exports to other countries, but typically you’re talking about the neighborhood of about 5 million tons, give or take a little bit, that goes to China.”

Trump’s proposed policies were factored into the state’s revenue estimates for the year, Muchow said.

“We considered the potential federal policies when these estimates were put into place a year ago,” he said. “There’s a lot of different risk factors involved here, and I think overall the estimates for severance taxes are still in pretty good shape for this year and into next year.”

Many of the president’s policies have been walked back or changed, and there isn’t yet an indication of how long the tariff will be in place, Muchow said.

“The trade stuff has still got to play out as to what policy is going to play out,” he said. “We’ll just have to see how it plays out over the long period of time. It’s a little uncertain as to what exactly that long-term policy is going to look like.”

The state’s severance tax collections — taxes imposed on coal, gas, timber and other natural resources extracted in the state — have dropped in recent years, Muchow said.

“We peaked in Fiscal Year ‘23, and the collections have gone down from like $1.18 billion or some number that was very high down to a little bit below the $400 million level,” he said. “In recent months that number has begun to level out.”

Energy prices are mostly to blame for the reduced severance revenues, Muchow said.

“Coal prices are down about 20, 25% from a year ago,” he said. “Natural gas prices have drifted lower, but now in recent months natural gas prices have turned around and are moving on up.”

Chris Hamilton, president of the West Virginia Coal Association, recently said his organization was “concerned” about the tariffs.

“We’re fully supportive of President Trump’s energy actions to date,” Hamilton said. “We remain committed to his energy appointees and programs, and, hopefully, this won’t result in any hardship for any duration.”

The tariffs’ impact on the coal industry will depend on several factors, Hamilton said.

“It depends on whether or not it really takes effect and how long the tariff lasts,” he said. “If it’s a couple of weeks or a month, there may be some adjustments in pricing, some negotiating of pricing, and perhaps some additional markets for that coal could be explored.”

The situation could help open up other markets for West Virginia coal, he added.

“Maybe there are some additional markets within the European community,” Hamilton said. “India is a big consumer. Japan is a big consumer right now of West Virginia coal.”

Hamilton pointed to a trade dispute between China and Australia in 2020 as an example.

“We were able to expand our exports into China when they had a similar trade war with Australia,” he said. “It allowed us to effectively double our exports to China because they got to the point where they were actually refusing shipments of Australian metallurgical coal. We were able to capitalize on that, just as others will be able to capitalize on our misfortune here if the tariffs remain in effect for a prolonged period.”

West Virginia exported more than 5.2 million tons of coal to China in 2023, according to West Virginia Coal Association data.