By Arathy Somasekhar and Karen Freifeld

HOUSTON, July 2 (Reuters) - The U.S. has cleared the way

for Enterprise Products Partners ( EPD ) to resume ethane

shipments to China, the company said on Wednesday, revoking a

restrictive license requirement that was put in place just weeks

ago as the U.S.-China trade war turned from tariffs to supply

chains.

The U.S. had placed new restrictions on ethane -- and a wide

swathe of other exports -- to China in late May and early June

after accusing Beijing of slowing shipments of rare earths vital

to automakers and other industries.

Wednesday's letter revoking the previous license requirement

comes after the United States and China resolved issues last

week surrounding shipments of rare earth minerals and magnets to

the U.S.

Last week, the Commerce Department sent letters to

Enterprise Products ( EPD ), Energy Transfer ( ET ), as well as

ethane traders Satellite Chemical USA and Vinmar International,

informing the companies they could load ethane on vessels

destined for China but could not unload the ethane in China

without authorization.

Energy Transfer ( ET ), Vinmar and Satellite did not immediately

respond to requests for comment. The U.S. Department of Commerce

and the White House also did not immediately respond to requests

for comment.

About half of all U.S. exports of ethane, which is extracted

from U.S. shale gas and primarily used as a petrochemical

feedstock, head to China, and a halt in shipments was set to

hurt U.S. producers as well as Chinese petrochemical

manufacturers.

Chinese petrochemical firms use ethane as a feedstock

because it is cheaper than naphtha. U.S. oil and gas producers

need China to buy their natural gas liquids as domestic supply

exceeds demand.