China has removed a 125% tariff on ethane imported from the United States. This tariff was put in place earlier this month but has now been dropped for a group of products that received special exemptions.
This decision is expected to help Chinese companies that use US ethane in making chemicals. It also helps the US, which produces ethane as a byproduct of its shale gas industry. Ethane is an important ingredient in plastics and other petrochemical products.
According to Reuters, two people familiar with the matter said the tariff was quietly removed in recent days. However, there has been no public announcement, and China’s Ministry of Commerce and Customs have not made any official comments yet.
Last week, Chinese officials gave similar tariff exemptions for items like medicines, microchips, and airplane engines. They also asked companies to list important goods that they want imported without extra charges.
The 125% tax on ethane was first added earlier this month as a response to new US tariffs against China. President Trump had announced steep new tariffs, saying China was taking unfair advantage in trade.
China is a major buyer of US ethane. In 2024, the US exported a record 492,000 barrels per day of ethane, and nearly half went to China. Chinese companies such as Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group depend on US ethane. Major US exporters include Enterprise Products Partners and Energy Transfer.
Ethane is just one of several goods that China is no longer taxing heavily. This is happening as the trade tensions between the two countries continue.
The news came shortly after US Treasury Secretary Scott Bessent said that high tariffs could cause big job losses in China. He warned that China might lose millions of jobs if it doesn’t ease the trade conflict.
President Trump’s administration had earlier raised tariffs on many countries but increased them the most for China. The trade situation remains tense, but steps like removing the ethane tariff might help ease the pressure.
