US goods tariff exemption: China Exempts Some US Goods from Tariffs
China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified. This move signals that the world’s two largest economies are prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession.
Business Reaction
The exemptions pushed the US dollar up slightly and lifted equity markets in Hong Kong and Japan. “As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,” said Alfredo Montufar-Helu, a senior adviser to the Conference Board’s China Center, a think tank.
Chinese Government Efforts
A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of US tariffs on investment and the operation of foreign firms in the country.
Industry-Specific Exemptions
The American Chamber of Commerce in China President Michael Hart said some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on “a certain number of aerospace equipment parts” including engines and landing gear.
Still on US goods tariff exemption
Potential Impact
The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off US exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response.
List of Exempted Products
A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Huatai Securities said the list corresponded to $45 billion worth of imports to China last year. The list included items ranging from vaccines and chemicals to jet engines.
China’s Economic Concerns
China’s economy headed into the trade war with rising unemployment, deflationary pressures, and heightened concern that a mounting backlog of unsold exports could drive domestic prices even lower. While China ran a trillion-dollar trade surplus in 2024, it also relies on the United States for key imports, including the petrochemical ethane needed to make plastics, and some drugs.
Pharmaceutical and Chemical Imports
Big pharmaceutical companies, including AstraZeneca and GSK, have at least one manufacturing site in the US for drugs sold in China, according to Chinese government data. Major ethane processors have already sought tariff waivers from Beijing because the US is the only supplier.
Potential Next Steps
Exemptions may be only a tiny step in a long process. “For those US-manufactured goods that cannot be procured from any other country, I do think there is an interest to exempt them of import tariffs, even if this is done unilaterally,” Montufar-Helu said. “But for some other goods like energy and agricultural commodities, I think the calculation is very different given that there are other sources that China can tap.”
Mahmoud Khalil Arrested Without Warrant, Court Docs Reveal
Would you like to Earn Money Online with just your mobile device?
If yes then click on the link below:
https://earnbean.ng/
