Chinese manufacturers earn far thinner margins than their U.S. peers, and that leaves them especially exposed as the latest round of tariffs bites. On average, U.S. listed producers in tradable goods ran net margins near 12% last year, compared with roughly 5% for Chinese counterparts. In a raft of sectors, communications gear, tech hardware, builders’ materials, household products, the gap is yawning, with American firms often posting north of 20% while Chinese rivals scrape by at low single digits.

With so little cushion, Chinese exporters can hold the line for a time by slashing prices and leaning on scale, but the economics are unforgiving: once intermediaries and retailers in the U.S. pass duties through, sticker prices rise, demand cools, and the squeeze rolls back up the supply chain. It’s what we saw in the late 2010s, only with bigger stakes this time, broader tariffs, tighter controls on transshipments, and fewer loopholes.

Saudi Aramco’s announcement of $90 billion in potential agreements with U.S. companies marks a major deepening of economic ties between the kingdom and the United States, and underscores how energy diplomacy is evolving in the era of strategic realignment and technological transition.

The deals—34 in total—were signed through Aramco’s domestic and international subsidiaries, including its U.S.-based Aramco Americas and Aramco Group Co. They span a wide array of sectors beyond traditional oil, including liquefied natural gas (LNG), fuels, petrochemicals, carbon capture and storage (CCS), hydrogen, and artificial intelligence. While not all the agreements carry firm dollar commitments yet, their combined potential value could reach $90 billion, according to the company.

The global petrochemicals industry is in the midst of one of its most severe downturns in decades, a slump that has been amplified by President Donald Trump’s tariff wars but rooted in a deeper structural imbalance: massive overcapacity. The sector, which converts oil-derived feedstocks such as naphtha, propane and ethane into plastics, has seen production expand far faster than consumption since 2022, dragging margins into negative territory and leaving even the largest producers struggling to break even.

The stakes are enormous. Plastics demand, for packaging, autos, electronics, and even renewable energy infrastructure like solar panels and wind turbine blades, is still expected to climb for decades as Asia’s middle class expands. That growth underpins forecasts from the International Energy Agency showing petrochemicals accounting for 95% of net oil demand growth between 2019 and 2024 and an additional 2.1 million barrels per day of feedstock demand growth by 2030.