The Blubber

China has lifted the 125% tariff on U.S. ethane imports that was imposed earlier this month, according to two individuals with direct knowledge of the decision. The exemption applies to a select group of products and is expected to ease pressure on Chinese companies that rely on American ethane for petrochemical manufacturing, while also helping U.S. producers find international buyers for the natural gas liquid, a byproduct of shale gas extraction.

The tariff removal occurred in recent days, the sources said, though it has not been publicly disclosed. Both individuals requested anonymity due to the sensitivity of the issue.

China’s Ministry of Commerce and customs authorities were not available for comment outside of regular working hours.

The exemption follows a broader effort by Beijing to soften the blow of its ongoing trade conflict with the United States. Last week, Reuters reported that China had also granted tariff relief on certain pharmaceutical, aerospace, and semiconductor goods.

Earlier this month, Beijing had sharply raised tariffs on U.S. imports—including ethane—to 125%, in retaliation for President Donald Trump’s latest round of trade penalties targeting the Chinese economy.

China remains a major consumer of American ethane, accounting for nearly 50% of total U.S. ethane exports, which hit a record high of 492,000 barrels per day in 2024, according to the U.S. Energy Information Administration. The EIA projects that exports will rise to 530,000 bpd in 2025 and reach 630,000 bpd by 2026.

Chinese companies that regularly import ethane include Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group. On the U.S. side, key exporters include Enterprise Products Partners and Energy Transfer.