【Text by Observer Net, Liu Bai】According to news from CCTV, earlier this month, relevant companies have received notification from the U.S. Department of Commerce to resume exports of ethane and other products to China. For the Trump administration's attempt to "choke" China with ethane, Jim Teague, co-CEO of American energy giant Product Partners Company (EPD), publicly expressed dissatisfaction on July 28.

Teague is a supporter of Trump and has personally donated funds to Trump. However, he issued a warning during the company's earnings call that if the Trump administration continues to "weaponize" fossil fuel exports, it will only backfire and ultimately harm U.S. exporters themselves.

In May and early June, the U.S. government had restricted the export of ethane and other products to China, citing China's restrictions on rare earth product exports. However, on June 25, the U.S. Department of Commerce revised part of its policy, stating that relevant producers and traders "can load ethane products onto ships bound for China, but may not unload them in China without authorization."

Ethane is the most common basic raw material for petrochemicals and plastics production globally. China is the largest importer of U.S. ethane, and the U.S. is the only major ethane exporter. Currently, about half of U.S. ethane exports go to China, and these goods are difficult to resell to other countries.

Due to the restrictions, U.S. ethane exports to China fell to 57,000 barrels per day in June, a new low in history.

Jim Teague, co-CEO of American energy giant Product Partners Company (EPD)

"We clearly understand the risks of weaponizing U.S. energy exports," said Teague during the phone call. "Such actions rarely harm the intended targets and often backfire, causing greater harm to our own industry."

"Fortunately, this administration understands the importance of energy and global trade, even though the Department of Commerce may need a little reminder," he said, "but unfortunately, we may face similar challenges in the future."

Tony Chovanec, the company's Executive Vice President, also stated that the U.S. government's restrictions caused the company to lose at least one non-Chinese customer.

He pointed out, "The approach of the Department of Commerce causes problems, as cutting off ties with trading partners actually damages America's brand image in terms of reliable supply and energy security. This indeed causes disruptions, and in the short term, we can cope with it through a diversified contract portfolio."

Although the U.S. has resumed ethane exports, a new report from East Daley Analytics states that China may seek alternative sources of U.S. ethane to avoid geopolitical interference. China may push Middle Eastern and European countries to further expand their ethane exports to achieve supply diversification.

"In recent years, U.S. ethane has been an unassuming power source for the global petrochemical industry, with low prices, sufficient supply, and considered immune from geopolitical influences. But this assumption no longer holds," East Daley Analytics noted. "The U.S.-China trade war revealed a key fact: there is currently no large-scale alternative to U.S. ethane. This once-stable raw material is now caught up in trade policies and long-term demand fluctuations."

On July 4, the spokesperson for the Chinese Ministry of Commerce responded to questions regarding the U.S. lifting related trade and economic restrictions on China. A reporter mentioned that recent reports indicated that relevant companies had received notifications from the U.S. Department of Commerce to resume exports of EDA software, ethane, aircraft engines, and other products to China.

The spokesperson stated that after the Sino-U.S. London economic and trade talks, both sides confirmed specific details on implementing the important consensus of the two heads of state's call on June 5 and consolidating the results of the Geneva economic and trade talks. At present, both sides' teams are accelerating the implementation of the London framework's outcomes. The Chinese side is legally and in accordance with regulations to approve export license applications for controlled items that meet the conditions. The U.S. has also taken corresponding actions to cancel a series of restrictive measures against China, and has informed the Chinese side about the situation.

The spokesperson emphasized that the London framework was hard-won, and dialogue and cooperation are the right path; extortion and coercion have no way out. It is hoped that the U.S. will deeply recognize the mutually beneficial nature of Sino-U.S. economic and trade relations, continue to move towards the Chinese side, further correct the wrong practices, and take concrete actions to maintain and implement the important consensus of the two heads of state's call, and jointly promote the steady and long-term development of Sino-U.S. economic and trade relations.

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