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SHANGHAI (Reuters) – China has developed a list of U.S.-made products eligible for exemption from its 125% tariffs and is discreetly informing relevant companies about this policy, according to two sources familiar with the situation. This move appears to be part of Beijing’s strategy to mitigate the effects of its ongoing trade war with the United States.
Among the products for which China has already granted tariff exemptions are certain pharmaceuticals, microchips, and aircraft engines. Companies are being asked to identify essential goods they wish to have exempted from tariffs, as reported by Reuters on Friday. Notably, the existence of this so-called ‘whitelist’ had not been disclosed before.
This discreet strategy allows Beijing, which has consistently stated its willingness to maintain its stance until the U.S. reduces its 145% tariffs, to offer concessions while still managing public perceptions.
Details regarding the number and types of products included in this exemption list remain unclear, as the authorities have not released this information publicly. The two sources, who chose to remain anonymous due to the sensitive nature of this information, indicated that companies are being contacted directly about the exemption classifications.
One source, affiliated with a pharmaceutical firm selling U.S. medicines in China, mentioned that the Shanghai Pudong government reached out to their company regarding the list. This firm had previously sought tariff exemptions due to its reliance on U.S. technologies.
“We still require a variety of technologies from the U.S.,” the individual stated.
Another source revealed that some companies had been encouraged to reach out to authorities to check whether their specific imported items qualify for these exemptions.
The range of products being exempted seems to be expanding; recently, China waived tariffs on ethane imports from the U.S., as reported by Reuters. Major ethane processors had already sought these waivers since the U.S. is their only supply source.
U.S. President Donald Trump mentioned on Tuesday that he believes a trade agreement with China may be on the horizon, emphasizing that it should be a “fair deal.”
Neither China’s commerce nor customs ministries responded immediately to inquiries for comment.
GAUGING IMPACT
Additional sources indicate that China is also gathering information from companies to understand the ramifications of the tariff conflict.
In a recent meeting, authorities in Eastern China requested a foreign business lobby group to “communicate all critical situations caused by tariff tensions to evaluate specific cases,” according to an individual with direct knowledge of the discussions. The city where this meeting took place has not been disclosed, as it was not made public.
Officials in Xiamen, a southeastern city in Fujian province known for its significant port and electronics manufacturing base, also circulated a survey on Sunday to evaluate tariff impacts. This survey targeted textiles and semiconductor firms, querying them about their trade with the U.S. and the potential effects of both U.S. and Chinese tariffs on their operations.
Source
finance.yahoo.com