China Quietly Exempts Key US Goods From Tariffs: Report

Chinese officials are quietly drawing up a “whitelist” of critical U.S. goods that importers rely on to exempt them from Beijing’s retaliatory tariffs, Reuters reported, citing unnamed people familiar with the matter.

The news adds to a growing number of reports from China of businesses discovering that tariffs have been waived on some goods, such as certain semiconductor and integrated circuit products.

It also shows how, underneath its tough rhetoric, Beijing is trying to mitigate the impact of the U.S. trade war on its export-reliant economy, the world’s second-largest, which was already under pressure from a broader slowdown.

Precisely which goods are on the new whitelist is not publicly known, but Reuters reported that Chinese authorities had privately contacted businesses to alert them of the relevant waivers.

China has said it is open to dialogue on trade but accused the U.S. of bullying, and said that it is willing to fight to the end.

U.S. President Donald Trump said he and his administration are engaged in talks with China—which Beijing has denied—and that he believes they will eventually make a deal on trade.

Trump has hit China with a 125 percent tariff, plus an additional 20 percent related to its role in the fentanyl trade, on top of other existing tariffs.

China has responded with a 125 percent tariff on U.S. goods, among other countermeasures on trade.

The toll of higher tariffs on U.S. imports of products from China is shown in the latest monthly surveys of Chinese factory managers. The official survey by the China Federation of Logistics and Purchasing shows export orders slowed in April.

The official manufacturing purchasing managers index fell to a 16-month low of 49.0 from 50.5 in March. That’s on a scale where 50 marks the break between expansion and contraction. A private survey by the financial information group Caixin fell to 50.4 from 51.2.

“The sharp drop in the PMIs likely overstates the impact of tariffs due to negative sentiment effects, but it still suggests that China’s economy is coming under pressure as external demand cools,” Zichun Huang of Capital Economics said in a report.

Earlier this week, senior Chinese economic officials convened a news conference where they showcased Beijing’s support for the economy and its capacity to do more to counter the impact of the tariffs.

The economy expanded at a solid 5 percent annual pace in 2024 and the ruling Communist Party has set a target for growth at about that level this year.

But that was before Trump escalated his trade war, piling on still higher tariffs with an aim of compelling manufacturers to rebase production to the United States.

“Overall, in April, the expansion in supply and demand slowed, with exports stunted and employment shrinking slightly,” the Caixin report said. “Manufacturers sought to reduce stocks, logistics were delayed, and prices remained under pressure. Market optimism weakened significantly.”

Private economists have downgraded their forecasts for the economy this year and next. Capital Economics estimates the economy will expand only 3.5 percent in 2025.

This is a developing article and more information will be added soon.

This article includes reporting by The Associated Press.