China Lifts Tariffs on U.S. Ethane, Easing Petrochemical Tensions

China has lifted the 125% tariff on U.S. ethane imports, a move set to relieve Chinese petrochemical firms and create an outlet for U.S. shale gas byproducts. Ethane is crucial for companies like Satellite Chemical and Sinopec, which heavily rely on U.S. exports for production.

In a significant policy shift, China has removed the 125% tariff on ethane imports from the United States, multiple sources confirmed on Tuesday. This comes as a relief to Chinese petrochemical firms, which utilize U.S. ethane as a vital component in their production processes.

The affected Chinese companies include Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group, while major U.S. exporters include Enterprise Products Partners and Energy Transfer. China is responsible for approximately half of U.S. ethane exports, according to statistics from the U.S. Energy Information Administration.

This tariff removal follows China's earlier move to impose higher duties on U.S. goods, a countermeasure against U.S. President Donald Trump's tariff policies targeting China. While Beijing has previously granted exemptions for essential goods like pharmaceuticals and aircraft engines, this ethane waiver marks a notable step in the ongoing trade negotiations.

(With inputs from agencies.)