In a move that could ease tensions in the ongoing U.S.-China trade conflict, China has officially removed its steep 125% tariff on American ethane imports. The tariff, originally imposed as retaliation against former President Donald Trump’s trade policies, had been a major obstacle for U.S. energy exporters.
This latest development, reported by Reuters, is being seen by the Trump administration as a positive step—one that might open the door for broader trade talks with Beijing.
While the U.S. had previously paused tariffs for most trading partners—replacing them with a standard 10% duty—Trump’s team kept, and even increased, tariffs on China. The rollback of the ethane tariff suggests China may be shifting its stance.
Ethane, a key component used in plastic and chemical production, is big business. Nearly half of U.S. ethane exports go to China each year, according to the U.S. Energy Information Administration. Major Chinese buyers include firms like Satellite Chemical, Sinopec, and Wanhua Chemical Group, while top U.S. suppliers include Enterprise Products Partners and Energy Transfer.
Ethane now joins a growing list of U.S. exports—along with pharmaceuticals, aircraft engines, and microchips—that China has chosen to exempt from trade penalties. The Chinese government is also urging domestic companies to identify other essential imports that should remain tariff-free.
In response to the tariff removal, Treasury Secretary Scott Bessent credited the Trump administration’s tariff strategy, calling the move “a sign that China is feeling the pressure.” Speaking at the White House, Bessent warned that China could face major economic consequences—including millions of job losses—if it doesn’t reconsider its broader trade policies.
“China exports nearly five times more to the U.S. than the U.S. sends back,” Bessent said. “That puts the leverage in our hands. These tariffs just aren’t sustainable for them.”
Bessent also revealed that the U.S. is close to finalizing a major trade deal with India, describing Prime Minister Modi as “very cooperative” in recent talks. Vice President Vance’s visit to India last week, he added, helped move negotiations forward. New trade agreements with South Korea and Japan may also be announced in the coming weeks.