Key points
- Tariff waiver eases pressure on Chinese petrochemical firms
- China buys nearly half of US ethane exports
- Exports to US from Chinese online shops have plunged
ISLAMABAD: China has waived the 125 per cent tariff on ethane imports from the United States imposed earlier this month, two sources with knowledge of the matter said on Tuesday, among a group of products that have been granted exemptions, according to Reuters.
The move will ease pressure on Chinese firms that import US ethane for petrochemical production as well as provide an outlet for the natural gas liquid, a byproduct of US shale gas production.
According to Reuters, the sources said the tariff on ethane had been waived in recent days. One of them said the waiver has not been publicly announced. They declined to be named due to the sensitivity of the matter.
Impact of trade war
Reuters reported last week that some pharmaceutical, aerospace and semiconductor products had also been granted tariff exemptions as Beijing tries to blunt the economic impact of its trade war with the United States.
China increased its levies on imports of US goods, including ethane, to 125 per cent earlier this month, hitting back at US President Donald Trump’s decision to single out the world’s No 2 economy for higher duties.
China buys nearly half of US ethane exports, which hit a record of 492,000 barrels per day in 2024, according to the US Energy Information Administration. The EIA expects US ethane exports to increase to 530,000 bpd in 2025 and to 630,000 bpd in 2026.
Ethane importers in China include Satellite Chemical (002648.SZ), opens new tab, SP Chemicals, Sinopec (600028.SS), opens new tab, Sanjiang Fine Chemical (2198.HK), opens new tab and Wanhua Chemical Group (600309.SS), opens new tab while the key US exporters are Enterprise Products Partners (EPD.N), opens new tab and Energy Transfer (ET.N), opens new tab.
China creates a list
According to Reuters, China has created a list of US-made products that would be exempted from its 125 per cent tariffs and is quietly notifying companies about the policy.
China has already granted tariff exemptions on select products including select pharmaceuticals, microchips and aircraft engines and was asking firms to identify critical goods they need levy-free, Reuters reported on Friday. However, the existence of a so-called ‘whitelist’ had not been previously reported.
It was not immediately clear how many and which products have been included on the list, which authorities have not shared publicly, according to Reuters.
Companies instead are being privately contacted by authorities and notified of the existence of a list of product classifications that would be exempted from the tariffs, according to Reuters.
In the face of trade war
According to Guardian, exports to the US from Chinese online shops such as Temu and Shein have plunged in the face of Donald Trump’s trade war, as shipping from China to the EU has increased.
Official Chinese data showed its total e-commerce shipping to the US dropped 65 per cent by volume in the first three months of the year, but rose by 28 per cent in Europe, according to Guardian.
