China announced on Tuesday (29) the suspension of the 125% tariff on ethane imports from the United States.
Ethane, a derivative of natural gas, plays a crucial role in the production of plastics and other industrial chemicals, being considered an essential input for the Chinese petrochemical industry.
Although it has not yet been officially announced by Beijing, the decision is seen as a strategy to mitigate the economic impacts of the prolonged trade war with Washington.
Analysts believe that this measure may signal an attempt to secure access to essential raw materials while strengthening its position in trade negotiations.
Ethane exports
Chinese companies such as Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group are among the main importers of ethane from the United States, according to a report by the Reuters news agency.
In 2024, China accounted for almost half of U.S. ethane exports, which reached a record of 492,000 barrels per day.
Estimates indicate that this number could rise to 530,000 barrels per day in 2025 and reach 630,000 barrels in 2026.
Among the main exporters of the product, Enterprise Products Partners and Energy Transfer stand out.
Measures taken by Beijing
The suspension of tariffs on ethane adds to other recent measures taken by Beijing, including tariff exemptions for American products in the pharmaceutical, aerospace, and semiconductor sectors.
Such actions reflect efforts to alleviate pressure on their economy while facing trade tensions with the United States.
Petrochemical sector
In the petrochemical sector, the removal of tariffs is expected to provide significant financial benefits for Chinese companies.
The measure will also reduce production costs and increase the competitiveness of these companies in the global market.
Additionally, the decision is expected to stimulate investments in infrastructure for the import and processing of ethane, consolidating China as one of the main petrochemical hubs in the world.
However, the absence of an official announcement from the Chinese government creates uncertainties about the extent and duration of this policy.
Sources: Reuters, Financial Times, Reuters.
Image reproduction: Port in New Jersey, USA • 07/12/2023. REUTERS/Mike Segar/File Photo