According
to official media reports, the China-U.S. economic and trade talks held from
May 10 to 11 made meaningful progress, with both sides significantly reducing
bilateral tariffs—an outcome that exceeded market expectations.
Specifically,
the U.S. agreed to remove 91% of the additional tariffs imposed after April 8,
and China reciprocated by canceling 91% of its retaliatory tariffs. In
addition, both sides agreed to suspend the implementation of the remaining 24%
of reciprocal tariffs for 90 days.
As a result, tariffs on crude oil imported from the U.S. will
temporarily revert to 20% (10% came from the countermeasures introduced in
early February, and the other 10% from those in early April), directly lowering
import costs. Meanwhile, tariffs on U.S.-origin petrochemical products have
also been reduced to 10%. Combined with the previous exemptions granted to
certain petrochemical feedstocks—such as ethane, which China heavily relies on
from the U.S.—this move temporarily eases feedstock concerns for domestic
ethylene crackers and PDH units.
However,
since the 24% tariffs have only been suspended, not officially removed, and
there remains uncertainty over whether the statement of this round of talks
will be effectively implemented, the market is still shadowed by concerns over
the tariffs on trade flows.
That said, the 90-day suspension period is expected to provide
both sides with a window for further negotiations on tariff issues.