China has been drawing up a list of US-made products that will be exempt from its 125% tariffs – in a bid to ease the impact of its trade war with the United States.
Officials have been notifying companies about the policy, according to sources who spoke to Reuters.
China has granted tariff exemptions on select products including pharmaceuticals, microchips and aircraft engines and it has been asking firms to identify critical goods they need levy-free. But the existence of a so-called ‘white-list’ had not been previously reported.
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The quiet approach allows Beijing, which has repeatedly said it is willing to fight till the end unless the US lifts its 145% tariffs, to maintain its public messaging while privately taking practical steps to provide concessions.
It was not immediately clear how many and which products have been included on the list, as authorities have not shared it publicly, the two sources said, declining to be named as the information was not public.
Companies are being privately contacted by authorities and notified of the existence of a list of product classifications that would be exempted from the tariffs, according to one of the sources who works at a drug company selling US-made medicines in China.
The company was contacted by the Shanghai Pudong government on Monday about the list, the source said, adding the firm had previously lobbied for tariff exemptions as it relies on US technologies for some of its products.
“We still have many technologies we need from the US,” the person said.
Tariffs waived on ethane imports
Another source said some companies have been asked to privately contact authorities to inquire if their own imported products qualify for the exemption.
The list of exempted products also appears to be growing. On Tuesday it was revealed that China has waived tariffs on ethane imports from the US.
Major ethane processors had already sought tariff waivers from Beijing because the US is the only supplier.
US President Donald Trump said on Tuesday he thought a trade deal with China was on the horizon. “But it’s going to be a fair deal,” he said.
China’s commerce and customs ministries did not immediately respond to requests for comment.
Assessing impacts
Two other sources said China is also surveying companies to gauge the impact of the tariff war.
In a recent meeting, authorities in Eastern China asked a foreign business lobby group to “communicate all critical situations caused by tariff tensions to evaluate specific cases,” a person with direct knowledge of the matter told Reuters.
The person declined to name the city where the authorities held the meeting as the gathering was not public.
Government officials in Xiamen, a city in southeastern Fujian province that is home to a major port and a manufacturing base for electronics, also sent out a survey on Sunday to companies to assess tariff impacts, said a source with direct knowledge of the matter.
The survey was sent to textiles firms and semiconductor companies and included questions on products they trade with the US, and the estimated impact of the US and Chinese tariffs on their business, the source said.
Moves to ensure retail supply lines
Meanwhile, US retail giants Walmart and Target are reported to have maintained business with Chinese toy and ceramics suppliers, after a pause in orders due to uncertainty about the imposition of US tariffs.
CNN reported on Tuesday that the resumption of trade with two factories came after a meeting last week between Donald Trump and heads of top American retailers, who warned the US president that store shelves could soon be empty across the US.
The move “suggests retailers are attempting to ensure their stores remain stocked” as tariffs threaten to disrupt supply chains that are crucial to their bottom lines, and ensure that key factories in China survive.
Reuters with additional input and editing by Jim Pollard
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