HOUSTON China's threat on Friday to slap a 5% tariff on U.S. oil imports could further soften demand for physical crude at hubs along the U.S. Gulf Coast, where exporters already have taken to shipping crude overseas without firm buyers, traders said.PADD 3 inventories last week rose to the highest in a month, at 225.1 million barrels, and were 12.4 million barrels higher than the same week last year, U.S. government data showed. Supplies have climbed as two new pipelines carrying U.S. shale from the Permian Basin opened last week, pushing key coastal grades to the lowest in a year.On Friday, China proposed clamping a 5% tariff on $75 billion in U.S. goods including oil for the first time in response to President Donald Trump's plan to impose 10% tariffs on Chinese-made consumer goods on Sept. 1 and Dec. 15.The tariff on oil imports would likely "shut off flows from the U.S. to China," leaving exporters to market a rising tide of shale oil to South Korea and Japan, said John Coleman, an oil analyst at consultants Wood Mackenzie.U.S. crude exports to China already had stalled in the last year, amid rising U.S.-China trade tensions. China’s imports of U.S. crude fell to just 3% of total U.S. crude exports this year, from 22% in the nine months ended June 2018, according to the American Petroleum Institute.Widely exported Mars Sour crude traded as low as a $1.05 premium this week to the U.S. benchmark, before inching back. Light Louisiana Sweet also was bid around $2.50, near its lowest in a year. Prices will have to fall sharply for shippers to profitably move U.S. crude to foreign buyers, traders said."They have further to fall," one U.S. crude trader said. "The arb has to widen for U.S. oil to find markets."West Texas Intermediate crude at Magellan East Houston, also called MEH, traded as low as $2 per barrel over U.S. crude earlier this week, the weakest since last August. It was quoted at $2.45 over WTI on Friday."Everyone's relief valve is Asia for these excess barrels," one U.S. trader said.