Chinese authorities are reportedly considering exempting certain US-imported products from the increased 125% retaliatory tariffs imposed on American goods. This move aims to help Chinese industries manage the significant cost pressures brought by comprehensive reciprocal tariffs.
Caijing reports that according to a document circulating in Chinese media that is claimed to be a list of tariff exemptions for US goods, more than ten tariff codes related to semiconductors and semiconductor manufacturing equipment may be excluded from additional tariffs by the Chinese government. However, memory chips are not included in the exemption list.
Products and components listed in the exemption document include certain lithography equipment, etching and stripping equipment, semiconductor modules, ICs, processors and controllers, IC amplifiers, and semiconductor testing instruments. In total, over ten tariff codes may be spared from the 125% retaliatory tariffs China had imposed on US goods.
The authenticity of this list has not yet been officially confirmed by the Chinese government. However, Chinese media pointed out that several individuals engaged in import-export business have stated the information is accurate and that they have received verbal notifications.
Insiders reveal that relevant Chinese government departments are contemplating excluding US products such as medical equipment and ethane chemical raw materials from these retaliatory tariffs.
Although US imports from China far exceed its exports to China, the proposed Chinese exemptions indicate a notable reliance on the US in specific economic areas. China is the world's largest plastic manufacturer but depends on US-imported ethane for some factories. Moreover, Chinese hospitals rely on advanced medical devices produced by GE Healthcare in the US, including MRI and ultrasound machines.
The final list of product categories eligible for tariff exemptions remains under adjustment, with ongoing discussions subject to change. Sources say officials have requested companies in affected industries to submit customs codes for US goods requiring exemption. At least one Chinese airline has been informed that payments made to aircraft leasing firms within free trade zones will not be subject to the new tariffs.
Bloomberg reports that China's contemplated measures mirror those taken by the US earlier this year. In April, the US exempted some Chinese exports from tariffs as high as 145%. These actions reflect the deep economic interdependence between the two countries in certain sectors, where escalating trade tensions risk threatening industry survival.
Article edited by Jack Wu
