Beijing has quietly begun to waive tariffs on some American goods, possibly involving imported goods worth about $40 billion.
According to Bloomberg’s report on May 2, a list of 131 American products (including pharmaceuticals and industrial chemicals) that are exempt from tariffs has been circulating among traders and businesses over the past week. The source of this list is still unclear and has not been officially confirmed, but sources familiar with the matter revealed that at least six Chinese companies are able to import goods on the exemption list duty-free. Due to the sensitive nature of the information, these sources requested anonymity.
Based on Chinese customs data analyzed by Bloomberg, these 131 items of goods are valued at around $40 billion, accounting for approximately 24% of China’s imports from the United States in 2024.
There are preliminary signs indicating that the trade impasse between China and the United States may be changing. On Thursday, U.S. Treasury Secretary Scott Bessent urged Beijing to engage in trade negotiations with the United States as soon as possible.
“China needs to reduce these high tariffs because it’s akin to a blockade, and China’s business model is built on selling cheap goods to the U.S. The products they sell to us are about five times what we sell to them,” Bessent added. “As we speak, their factories are shutting down.”
“We are entering the holiday season. Orders will start coming in now, so if orders are not placed, it could be devastating for China,” Bessent said.
China’s Ministry of Commerce stated on Friday (May 2) that it is assessing the possibility of trade negotiations with the United States.
Sources told Bloomberg that Chinese officials started in the second week of April to request foreign companies to list U.S. imports that are critical to their operations and are difficult to replace. Since then, some of these products have been granted a 125% tariff exemption.
So far, after several rounds of tit-for-tat tariff increases, China imposes a 125% tariff on U.S. imports, while the U.S. imposes a 145% tariff on Chinese imports.
On Wednesday (April 30), the latest official economic data released by China indicated that the trade war has dealt a heavy blow to the Chinese economy, with a decline in export orders and factory activity dropping to the lowest level in over a year. The abrupt decline in trans-Pacific trade activities has led to a stagnation in domestic production in China and threatens the employment of tens of thousands of Chinese people.