China Grants Tariff Exemptions on Key US Goods, Signaling Bid to Ease Trade War Strain

China has begun granting exemptions from its steep 125% tariffs on select US imports, marking a significant shift in its approach to the ongoing trade war with Washington. The move comes as Beijing faces mounting economic pressure, with weak consumer demand and supply chain vulnerabilities threatening its industrial recovery.

 

Key Highlights:

 

Targeted Exemptions: The exemptions focus on critical imports such as semiconductors (excluding memory chips), advanced medical equipment, industrial chemicals like ethane, and certain aerospace components. These sectors are vital for China’s manufacturing and healthcare industries, which rely heavily on US technology and supplies.

 

Business Engagement: China’s Ministry of Commerce has actively solicited input from businesses, asking them to identify “irreplaceable” US-made products that are essential to their operations. A provisional list of 131 product categories—including vaccines, jet engines, and chemicals—has circulated among companies, though not officially confirmed.

 

Economic Rationale: The exemptions reflect Beijing’s concern over the trade war’s economic toll, as many Chinese firms report shrinking profits and disrupted supply chains. Granting relief aims to stabilize key industries and alleviate cost pressures.

 

Global Impact: The decision has lifted market sentiment in Asia and signals a possible thaw in US-China trade tensions, even as both sides maintain tough rhetoric publicly.

 

While the exemptions are selective and not yet formalized across all sectors, they represent China’s most concrete step yet to cushion its economy from prolonged tariff pain.

 

Source: Reuters, CNN, Business Standard, MarketScreener