Who Will China's Floated Propane Tariffs Punish? Not the U.S.
- Chinese buyers already locked in with long-term agreements
- Changing propane trade routes likely to raise global prices
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A proposed 25 percent tariff on China’s imports of American propane probably won’t hurt U.S. companies as much as intended.
That’s because U.S. propane exporters got Chinese buyers like China Petroleum and Chemical Corp., known as Sinopec, to sign long-term, binding contracts that include multimillion dollar fees as a penalty for breaking the agreements. It’s not unheard of for buyers to pay the cancellation fee, or for Chinese buyers to renege on their contracts with U.S. exporters, but the optics aren’t so pretty.