China has quietly begun exempting a select group of U.S. imports from tariffs, a move that could affect up to $40 billion worth of goods and appears designed to shield its economy from the ongoing U.S.-China trade war, according to a report by Bloomberg News.
A list of 131 U.S. products—including pharmaceuticals, industrial chemicals, and specialized materials—has been circulating discreetly among Chinese traders and businesses over the past week. While the source of the list remains unconfirmed and no official announcement has been made, at least half a dozen Chinese companies have already successfully imported these goods tariff-free, Bloomberg reported, citing unnamed sources familiar with the matter.
The exemptions represent about 24% of Chinese imports from the U.S. in 2024, based on customs data analyzed by Bloomberg and the RAND China Research Center. This aligns closely with similar U.S. tariff waivers on Chinese imports, which cover roughly 22% of American purchases from China, suggesting a strategic rather than conciliatory motive.
“China is likely trying to mitigate damage to its economy by avoiding a collapse in key imports,” said Gerard DiPippo, associate director at the RAND China Research Center. “The exemptions shouldn’t be interpreted as a signal to the U.S., as China has been quiet about its exemptions, working through business channels and avoiding public statements.”
Among the exempted items are essential materials such as ethane, used in plastic manufacturing—a sector where China leads globally but still depends on U.S. supply. Two Chinese plastics producers have already received tariff waivers for U.S. ethane, according to energy analytics firm Vortexa.
Bloomberg previously reported that Chinese officials have considered expanding these waivers to cover additional products such as medical devices and aircraft leasing services. These actions mirror earlier moves by the U.S. to exempt consumer electronics and other critical imports from steep tariffs imposed under the Trump administration.
Economists see these exemptions as pragmatic. “Exempting critical, hard-to-replace U.S. products from tariffs could ease tensions with the U.S. and serve the interests of Chinese industry,” said Chang Shu, Chief Asia Economist at Bloomberg Economics. “Anything that helps lower the temperature in the trade war is also beneficial from the perspective of avoiding broader clashes with the U.S.”
There are tentative signs of a broader diplomatic thaw. China’s Commerce Ministry said on Friday it is currently evaluating the possibility of resuming trade talks with Washington. “The U.S. has recently sent messages to China through relevant parties, hoping to start talks,” the ministry said, briefly lifting investor sentiment during a mainland holiday.
The trade war has taken a toll on both economies. China’s factory activity recently saw its steepest decline since December 2023, prompting major financial institutions like UBS and Goldman Sachs to cut growth forecasts for the country to around 4%—well below Beijing’s 5% target.
Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai, said the exemptions fit a broader effort to limit economic self-harm. “Tariffs are a kind of self-inflicted thing,” Wu noted. “And we want to control the damage as much as we can.”
