China Lifts Tariff on U.S. Ethane Imports

On Tuesday, China removed its 125% tariff on U.S. ethane imports, a notable move in the ongoing U.S.-China trade conflict. The tariff had been imposed in retaliation for former President Donald Trump’s trade policies. Trump had suspended tariffs for other nations, but increased duties on Chinese goods instead.

A Positive Signal for U.S. Trade Policy

The Trump Administration sees the tariff removal as a sign China may return to the negotiating table. Treasury Secretary Scott Bessent stated, “This is a sign that the president’s tariff strategy is working,” and warned China that “millions of jobs” could be at risk if the trade war continues.

Ethane’s Role in U.S.-China Trade

China receives nearly 50% of U.S. ethane exports, according to the U.S. Energy Information Administration. Major Chinese companies like Satellite Chemical, Sinopec, and Wanhua Chemical depend on these imports. Key U.S. exporters include Enterprise Products Partners and Energy Transfer.

China has added ethane to a growing list of exempted U.S. products, which already includes pharmaceuticals, microchips, and aircraft engines. “They are finally beginning to understand the consequences,” Bessent said during a White House briefing.

Outlook on Asian Trade Deals

Bessent emphasized that China’s tariffs are unsustainable, citing data that forecasts “up to 10 million jobs” lost if current policies remain. He also pointed out that the U.S. imports significantly more from China than it exports, stating, “The United States is the deficit country.”

In contrast, U.S. trade talks with India, South Korea, and Japan appear more promising. “They have been the most cooperative in negotiating these deals,” Bessent noted, hinting at upcoming announcements.