China is now thinking about giving some American-made products a break from its extremely high tariffs. These tariffs, as high as 125%, were part of a tough trade war between China and the United States. The move to possibly ease some of these taxes shows that China might be worried about how the trade war is hurting its own economy.
The Chinese Ministry of Commerce has created a taskforce to study the issue. This team is now asking companies to send in lists of US goods they import that are hard or even impossible to replace with items from other countries. This step is seen as one of the biggest signals so far that the trade war is putting real pressure on China’s industries.
According to a report in a local financial magazine, Chinese officials are thinking about exempting eight items related to semiconductors. However, memory chips—used in computers and phones—are not included in that group for now.
Chinese companies are being asked questions like, “What are you buying from the US that you cannot get anywhere else?” If a company can prove that it absolutely needs a product from the US and can’t get it anywhere else, that product might be added to an exemption list. This way, the company’s supply chain will not break down.
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Some businesses are already reporting that certain goods they brought into China last week did not have any extra tariffs added. This is another sign that exemptions may already be quietly happening.
Products on the Table: From Jet Engines to Vaccines
A list of 131 types of products that may be given a tariff break was widely shared on social media and in business circles on Friday. The list includes a wide mix of items such as vaccines, chemicals, and even jet engines. While no one knows for sure if this list is official, it is being taken seriously by many.
A well-known Chinese financial company, Huatai Securities, studied the list and said that it covered imports worth $45 billion last year. That is a big number, showing just how much trade could be affected by these changes.
So far, the Chinese customs department has not confirmed the list. Phone calls to their office went unanswered, and they also didn’t reply to questions sent by fax. The Ministry of Commerce also stayed silent.
In the past, the US has allowed some goods from China to enter without tariffs, especially electronic items. But China had taken a stronger stand, saying it would keep fighting unless the US removed its tariffs first. Now, things may be slowly changing behind the scenes.
China’s Economic Struggle and the Need for Key Imports
While trade tensions continue, China is also facing economic problems at home. The economy is dealing with weak demand, slow consumer spending, and a general feeling of low confidence since the COVID-19 pandemic. All of this means that China’s leaders have to think carefully about how much more pressure the country can handle.
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The government has been telling Chinese companies that are hit by tariffs to sell more in their home market. But businesses say this is easier said than done. Profits are lower in the local market, customers are not as dependable, and demand is just not strong enough.
The possible exemptions from tariffs could be a way to offer real help. For instance, many goods from the US—like certain petrochemicals and medicines—do not have easy replacements. Some could take years to produce elsewhere. That’s why Chinese officials are giving these requests serious attention.
Large pharmaceutical companies that sell medicine in China often make those drugs in the US. Chinese records show that big names in the drug business operate at least one factory in the US to supply the Chinese market. The same goes for major petrochemical products like ethane. At the moment, the US is the only major supplier of this chemical, which is used in making plastic and other products.
For that reason, Chinese importers of ethane and pharmaceutical products have already asked for special waivers so they can keep buying from the US without paying huge tariffs.
China’s decision to consider tariff exemptions may be a sign that, even in a tough trade war, both sides sometimes need to step back and think about what really helps their people and industries.
