China Exempts U.S. Tech and Pharma Goods from Tariffs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ China exempts some U.S. goods from 125% tariffs. Beijing quietly rolls back levies on semiconductors and aircraft parts. Move signals effort to reduce economic fallout of trade war.
China Softens Trade War Blow with U.S. Tariff Exemptions — Quick Looks
- Tariff Relief: China exempts selected U.S. imports from its steep 125% retaliatory tariffs.
- Focus Areas: Exemptions include key semiconductors, aircraft components, and pharmaceuticals.
- Business Outreach: China’s Ministry of Commerce is asking firms to submit exemption requests for essential imports.
- Unannounced Move: The exemptions are not publicly declared but confirmed by import agencies and business leaders.
- Broader Implications: Shift comes amid fears of recession and signs the trade war is hurting both economies.
- Tech Sector Targeted: China quietly removed tariffs on some U.S.-made chips vital to its electronics industry.
- Aviation Support: Safran and other aerospace firms confirm exemptions for jet engines and gear.
- Negotiation Signals: Trump hints at a tariff rollback, but Beijing denies formal trade talks are underway.
China Quietly Rolls Back Tariffs on U.S. Goods to Ease Trade War Pressure
Deep Looks
April 25, 2025 | In a notable shift, China has begun exempting key U.S. imports from its 125% retaliatory tariffs, signaling a tactical move to cushion domestic industries from the economic fallout of its trade war with the United States.
The exemptions apply to critical components such as semiconductors, aircraft parts, and certain pharmaceuticals, according to Chinese import agencies and company executives briefed on the changes. While not formally announced by Beijing, the rollback marks the clearest sign yet that China is seeking to reduce internal pressures while maintaining a firm stance in public.
Stealthy Exemptions Target High-Impact Sectors
Among the most high-profile changes:
- Semiconductors: Agencies in Shenzhen report that tariffs on eight categories of U.S.-made integrated circuits have been quietly lifted. These include logic chips, which are vital to nearly every electronic device.
- Aircraft Parts: French aerospace giant Safran confirmed that China is now exempting “a number of parts,” including jet engines and landing gear, from added tariffs.
- Pharmaceuticals: Several U.S. drugmakers reportedly received waivers, allowing shipments to enter China tariff-free, especially for products unavailable from other sources.
China Seeks Input from Businesses
China’s Ministry of Commerce has reportedly convened with over 80 foreign businesses and chambers of commerce, asking which U.S. products are irreplaceable and should be excluded from the tariff list. The move aligns with a larger damage control strategy as the trade war threatens to stall its recovery amid deflation and rising unemployment.
A list of 131 goods, said to be under review for exemptions, circulated widely among business groups and on social media, though the government hasn’t officially confirmed it. The list includes vaccines, petrochemicals, and jet engines — products China either doesn’t produce domestically or cannot source elsewhere at scale.
Trade War Pressures Mount on Both Sides
China’s exemption move follows a slight softening in tone from President Donald Trump, who said this week that the 145% tariffs on Chinese imports “will come down substantially” if a deal is reached. However, Chinese officials maintain that no trade negotiations are currently underway, with Foreign Ministry spokesperson Guo Jiakun flatly denying any such dialogue.
Despite Trump’s optimistic comments, Beijing continues to demand a full rollback of all U.S. tariffs as a precondition for formal talks.
Market Impact and Strategic Implications
The tariff exemptions helped lift equity markets in Hong Kong and Japan and nudged the U.S. dollar higher, indicating investor relief. Economists say the move could signal the start of a broader de-escalation — or at least a tactical pause in the tariff tit-for-tat.
“China isn’t signaling surrender,” said Alfredo Montufar-Helu, senior adviser at The Conference Board’s China Center. “It’s signaling a strategic reshuffle — exempting the goods it desperately needs while maintaining a hardline stance on broader trade terms.”
Meanwhile, U.S. firms like Intel, Nvidia, and Texas Instruments, which rely heavily on Chinese demand for chips and hardware, stand to benefit if the exemptions remain in place.
Bigger Picture: Fragile Truce or Opening Shot?
While limited exemptions won’t end the trade war, they could serve as confidence-building measures in a larger negotiation — even if neither side wants to be seen as making the first move.
“This could be the beginning of a tactical unwind,” said Duncan Clark, head of Beijing-based advisory firm BDA. “China still needs the U.S. — especially for chips. And the U.S. is realizing that breaking supply chains hurts both sides.”
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