China Grants Tariff Exemptions on US Imports

In a move signaling its concern over the ongoing trade war with Washington, China has announced new tariff exemptions on select imports from the United States.

The decision is seen as part of broader efforts by Beijing to ease tensions and minimize economic disruption, as both the Chinese and US governments hint at a possible softening of their long-running trade dispute.

The exemptions, which could impact dozens of industries, are expected to reduce import costs and offer relief to Chinese companies dependent on key US goods. This development has had a positive ripple effect on global markets, including a boost to the US dollar and stock indices in Hong Kong and Japan.

According to sources familiar with the matter, China's Ministry of Commerce has established a task force to collect lists of US goods that could be eligible for the exemptions. Domestic companies have been invited to submit requests for consideration.

Michael Hart, President of the American Chamber of Commerce in China, said Chinese authorities have been reaching out to US businesses to identify products that are difficult to source from countries other than the US, potentially threatening supply chains if those imports are disrupted. 

Some American firms reported last week that shipments of certain US goods entered China without being hit by new tariffs.

In the aerospace sector, Safran, a French manufacturer of aircraft engines, confirmed that it was notified on Thursday that exemptions had been granted on specific aviation parts, including engines and landing gear components.

China’s Ministry of Commerce also held a meeting on Thursday with more than 80 foreign companies and business chambers to discuss the impact of US tariffs on foreign investment and the operations of international firms in China.

The exemptions under review may significantly reduce costs for Chinese businesses across sectors such as pharmaceuticals, aviation, semiconductors, and petrochemicals.

This could also ease the burden on American exports, especially as the US administration under President Donald Trump shows signs of openness to reaching a trade agreement.

The European Chamber of Commerce in China confirmed it has raised the issue of tariff relief with Chinese authorities and is awaiting a formal response. Its president, Jens Eskelund, noted that many member companies have suffered losses due to import tariffs on essential U.S. components.

On Chinese social media and business forums, an unofficial list of 131 product categories being considered for exemptions has been widely circulated. These reportedly include vaccines, chemicals, and aircraft engines. Analysts at Huatai Securities estimate the value of these imports at $45 billion in 2024 alone.