AsianFin -- China could lift tariffs on key petrochemical feedstocks—ethane and liquefied petroleum gas (LPG)—if trade negotiations with the U.S. show positive momentum, according to a new report from Goldman Sachs.

“If tariff negotiations between the U.S. and China prove constructive, imports of petrochemical feedstocks may top China’s tariff exemption list for both historical and economic reasons,” analysts including Daan Struyven wrote. The report noted that similar waivers were granted during earlier rounds of U.S.-China trade tensions in 2018.

The trade war has heavily impacted China’s plastics industry, which relies significantly—sometimes entirely—on U.S. supplies of these raw materials. Since tariffs were imposed, some U.S. LPG shipments have been rerouted, with cargoes intended for China swapped out for Middle Eastern supplies.