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China is reportedly weighing whether to exempt U.S. imports from 125% tariffs as it becomes clearer about the economic fallout in the ongoing trade war with Washington.
With each report from Reuters, the Commerce Department’s Task Force Department collects a list of items that could be exempt from customs duties and asks businesses to submit their own requests.
Financial News Magazine Caijing reported on Friday that Beijing is preparing to include eight semiconductor-related items, but is not a memory chip.
A list of more than 130 categories eligible for exemptions ranging from vaccines and chemicals to jet engines was widely distributed among businesses and trade groups on Friday.
China is not negotiating with us in the trade war, Beijing says
Gantry crane stands near a shipping container in Yangshan Port, a suburb of Shanghai, China, on April 15, 2025. (Reuters/Gona Kamura/Reuters)
The scope of the possibility of exemption remains unknown, but Huatai Securities analyzed the circulating list in trade groups and said it was equivalent to imports worth $45 billion last year.
President Donald Trump has expressed optimism about a potential trade deal with China. (Photo: Brandon Bell / Getty Images / Getty Images)
Washington says the current situation is economically unacceptable and it has already offered tariff exemptions for some electronic goods. However, Beijing has taken a more difficult position by saying it is willing to fight to the end unless the US lifts tariffs.
The exemption is a bigger gesture of support, but by allowing some trade to resume, it reduces the pain of the US economy and puts some pressure on the White House.
File Photo: Employees are working with sewing machines on the production line of a midnight charm garment lingerie factory in Guanyong County, Jiangsu Province, China on November 25, 2024. (Reuters/Reuters)
The escalating trade war between the two global superpowers comes amidst weak demand in China, where consumer spending and sentiment has never recovered properly from pandemic levels.
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The government is pushing exporters that have hit tariffs into the local markets to pivot, but companies say they have low profits, weak demand, and customers are less reliable.
Reuters contributed to this report.
