China has created a list of U.S.-made products that would be exempted from its 125 per cent tariffs and is quietly notifying companies about the policy, two people familiar with the matter said, as Beijing seeks to ease the impact of its trade war with Washington.
China has already granted tariff exemptions on select products, including select pharmaceuticals, microchips and aircraft engines, and was asking firms to identify critical goods they need levy-free, Reuters reported last week. However, the existence of a “whitelist” had not been previously reported.
The quiet approach allows Beijing, which has repeatedly said it is willing to fight until the end unless the U.S. lifts its 145 per cent 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, which authorities have not shared publicly, the two sources said, declining to be named as the information was not public.
Companies instead 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 U.S.-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 U.S. technologies for some of its products.
“We still have many technologies we need from the U.S.,” the person said.
Canadian canola farmers are preparing for an extra volatile season, with existing Chinese tariffs, possible tariffs from the U.S. and the ongoing trade war between their two biggest customers.
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: China has waived tariffs on ethane imports from the U.S., Reuters reported on Tuesday.
Major ethane processors had already sought tariff waivers from Beijing because the U.S. is the only supplier.
U.S. 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.
Gauging impact of tariff war
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.
Front Burner41:19When China and the U.S. fight, who wins?
A big part of Donald Trump’s global tariff regime targets the Chinese economy in a bid, he says, to force the country into a deal favorable to the United States. Despite this, officials in China have been undeterred — claiming that tariffs will hurt Americans more than Chinese, and drawing comparison between the actions of Donald Trump and Mao Zedong’s ‘cultural revolution.’
Chinese officials have also responded to Donald Trump’s tariff program saying, in part: “if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
David Rennie is a columnist with The Economist, where he formerly worked as the magazine’s Beijing correspondent. He joins us for a conversation about the China-U.S. relationship, why officials in China view Trump as a ‘revolutionary’ figure, and this as a one of the great moments of opportunity in China’s modern history.
For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts [https://www.cbc.ca/radio/frontburner/transcripts]
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 U.S. and the estimated impact of the U.S. and Chinese tariffs on their business, the source said.