On Tuesday, China lifted a 125 percent tariff on ethane imports from the United States, marking a significant concession in the ongoing trade conflict, as reported by Reuters.

Initially, this tariff was implemented in response to President Donald Trump’s tariff policies, which primarily targeted China.

While Trump announced a 90-day suspension of most tariffs on other trading partners, substituting them with a standard 10 percent duty to facilitate negotiations, the tariffs on Chinese products not only persisted but were raised to 125 percent.

The Trump Administration views China’s decision to eliminate the ethane tariff as a positive development, indicating that the Chinese government may soon be willing to engage in negotiations.

According to the U.S. Energy Information Administration, as of this report, China accounts for nearly 50% of the ethane exports from the United States annually. Prominent Chinese firms that depend on these exports include Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group. The primary exporters from the U.S. are Enterprise Products Partners and Energy Transfer, as reported by Fox Business.

Ethane has been added to an expanding list of exports for which China has provided tariff exemptions amid the ongoing trade conflict with Washington D.C. Recently, the Chinese government also granted exemptions for pharmaceuticals, microchips, and aircraft engines, while urging Chinese companies to pinpoint essential exports that should remain exempt from tariffs. In response to the announcement of the latest exemption, U.S.

Treasury Secretary Scott Bessent praised it as a sign of the effectiveness of the president’s tariff strategy and asserted that China will soon engage in negotiations. During a statement from the White House on Tuesday morning, Bessent highlighted that the continuing trade war could result in the loss of millions of jobs in China if the Chinese Communist Party does not alter its approach.

According to Bessent, it is likely that the Chinese tariffs will prove to be unsustainable for China in the long run. He noted that recent data suggests that if these tariffs persist, China could potentially lose up to 10 million jobs in a short period.

Furthermore, even a reduction in tariffs could result in a loss of 5 million jobs. Bessent emphasized that the United States is the deficit country, as China exports nearly five times more goods to the U.S. than vice versa. Therefore, the responsibility to eliminate these tariffs lies with China, as they are not sustainable for their economy.

Bessent also noted that a trade agreement with India, along with potential agreements with other significant Asian trading partners, is imminent. He stated, ‘They have been the most cooperative in negotiating these deals.’ Furthermore, he mentioned that Vice President Vance visited India last week, where he and Modi achieved substantial progress, suggesting that announcements regarding India could be forthcoming.

The Secretary of the Treasury has previously conveyed a positive outlook regarding discussions with South Korea and Japan, suggesting that new agreements may be finalized in the coming weeks.