China Reportedly Begins Exempting Key US Imports From Tariffs, Including Pharma And Aerospace Parts

In a move indicating a possible easing of trade tensions, China has reportedly started to exempt some U.S. imports from high tariffs and is proactively seeking feedback from companies on other key items they want excluded from them.

What Happened: Companies in China say that they have been approached by officials to identify U.S. goods that are essential and difficult to replace, reported Reuters.

Some pharmaceutical imports and aerospace parts like engines and landing gear have reportedly already been excluded from the 125% tariffs. American Chamber of Commerce in China President Michael Hart confirmed that multiple member firms, especially in pharma, have not had to pay tariffs.

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Why It Matters: The exemptions are being made as both Beijing and Washington demonstrate noticeable signs of de-escalation in a trade war that has upset markets and stressed global supply chains. “As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,” said Alfredo Montufar-Helu of the Conference Board’s China Center.

However, he said that neither side seems keen to make the first formal move to make a deal. China’s Ministry of Commerce denied rumors of trade discussions with the U.S. on Thursday.

While China’s leadership has not made any official statement about the exemptions, the move seems to be targeted at shielding domestic industries from even more pressure. With major sectors still reliant on American inputs— ranging from ethane to specialty drugs—the exemptions may be just the beginning. “For irreplaceable goods, there’s clear interest in unilateral exemptions,” Montufar-Helu observed.

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