Exemptions Worth Billions Aim to Ease Trade Pressure and Protect Economy
China has quietly removed tariffs on around $40 billion worth of U.S. imports, likely aiming to reduce internal economic pressure from the ongoing trade dispute.
The exemptions apply to 131 items, such as medical devices and industrial chemicals, which are essential to China’s domestic production.
Multiple companies report receiving waivers, even though the Chinese government has not publicly confirmed the list. The products represent about 24% of China’s 2024 imports from the U.S., reflecting a strategic response rather than a public diplomatic gesture.
The U.S. previously lifted tariffs on certain Chinese electronics, and experts believe China’s move mirrors that policy to stabilize its own industries. “China is likely trying to mitigate damage to its economy by avoiding a collapse in key imports,” said Gerard DiPippo from RAND.
Officials in China started asking businesses in April to name critical U.S. goods. Those goods have since received exemptions from the 125% tariff. This flexible list is expected to change based on China’s needs and availability of alternative sources.
Economic data shows signs of stress, with China’s factory output contracting sharply and growth forecasts dropping below 5%. Some domestic plastic producers have already received exemptions for U.S. ethane imports.
Trade officials in China suggest the country is considering talks with the U.S. Economist Chang Shu remarked, “Anything that helps lower the temperature in the trade war is also beneficial from the perspective of avoiding broader clashes with the U.S.”
These exemptions offer hope for reduced tension while prioritizing China’s own economic interests.