China exempts some U.S. imports from 125% tariff rate | CBC News (2025)

Thomson Reuters

· Posted: Apr 25, 2025 9:27 AM EDT | Last Updated: April 25

China exempted some U.S. importsfrom its 125 per cent tariffs on Friday, according to businesses, although China quicklyknocked down U.S. President Donald Trump's assertion thatnegotiations between the two countries were underway.

Trump's administration has in recent days signalled it is lookingto de-escalate the confrontation between the world's two largesteconomies, which has so farfrozen much of thetrade between them andraisedfears of a global recession.

"As a quid-pro-quo move, it could provide a potential way tode-escalate tensions," said Alfredo Montufar-Helu, a senioradviser to the Conference Board's China Center, a think-tank.

Buthe cautioned: "It's clear that neither the U.S. norChina want to be the first in reaching out for a deal."

Trump told reporters onFriday that he had spoken to Chinese President Xi Jinping "numerous times," but did not say when the two leaders lasttalked or what topics they discussed.

This comes shortly after Trump told Time magazine in aninterview that the Chinese president had called him.

"He's called. And I don't think that's a sign ofweakness on his behalf," Trump told the magazine.

Beijinghas so far disputed the U.S. characterization of talks— the Chinese Embassy said again on Friday that there have been no talks between the two countries, adding in a statement that the U.S. should "stop creating confusion."China has also notcommunicated publicly on any exemptions.

WATCH | What a trade war could mean for the world order:

A Friday statement by the Politburo, the Communist Party'selite decision-making body, focused on efforts to maintainstability at home by supporting firms and workers most affectedby tariffs.

The readout, which followed the Politburo's regular monthlymeeting, showed that Beijing was also ready to hunker down andfight a trade war of attrition if needed to outlast Washingtonin enduring trade war pain.

A Ministry of Commerce task force is collecting lists ofitems that could be exempted from tariffs and is askingcompanies to submit their own requests, according to a personwith knowledge of that outreach.

The ministry said on Thursday it had held a meeting withmore than 80 foreign companies and business chambers in China todiscuss the impact of U.S. tariffs on investment and theoperation of foreign firms.

"The Chinese government, for example, has been asking ourcompanies what sort of things are you importing to China fromthe U.S. that you cannot find anywhere else and so would shutdown your supply chain," American Chamber of Commerce in China president Michael Hart said.

Hart added some member pharmaceutical companies had reportedbeing able to import drugs to China without tariffs. He believedthe exemptions were drug-specific, not industrywide.

The chief executive of French aircraft engine maker Safransaid on Friday it had been informed the previous nightthat China had granted tariff exemptions on "a certain number ofaerospace equipment parts" including engines and landing gear.

The tariff exemptions under consideration by Beijing couldprovide cost relief for companies in China and take pressure offU.S. exports at a time when the Trump administration has shownsigns of wanting to make a deal with Beijing.

WATCH |The escalation of an international trade war:

A list of 131 categories of products said to be underconsideration for tariff exemptions was circulating on Chinesesocial media platforms and among some businesses and tradegroups on Friday. Reuters could not verify the list, whichincluded items ranging from vaccines and chemicals to jetengines.

Huatai Securities said the list corresponded to $45 billion US worth of imports to China last year.

China's customs agency and Ministry of Commerce did notreply to requests for comment. China's Foreign Ministry said itwas not familiar with tariff exemption plans, redirectingqueries to "relevant authorities."

Lasting fight

While Washington has said the trade standoff with China iseconomically untenable and already offered tariff exemptions tosome electronic goods, China has repeatedly said it is willingto fight to the end unless the U.S. lifts its 145 per centtariffs.

But China's economy headed into the trade war with risingunemployment, deflationary pressures and heightened concern thata mounting backlog of unsold exports could drive domestic priceseven lower.

While China ran a trillion-dollar trade surplus in 2024, italso relies on the United States for key imports, including thepetrochemical ethane needed to make plastics and some drugs.

Big pharmaceutical companies including AstraZenecaand GSK have at least one manufacturing site inthe U.S. for drugs sold in China, according to Chinesegovernment data.

Major ethane processors have already sought tariffwaivers from Beijing because the U.S. is the only supplier.

Trump touts possible deals

Trump told reporters at the White House that he was veryclose to a deal with Japan. That is seen by analysts as a "testcase" for other bilateral trade agreements, although talks couldbe difficult. Some expect Prime Minister Shigeru Ishiba andTrump to announce a pact when they meet at the G7 summit inCanada in June.

Trump separately told Time magazine that he had made "200 deals" thatwould be completed within three to four weeks, although hedeclined to provide specifics. He said he would consider it a"total victory" if tariffs were still 20 per centto 50 per centa year fromnow.

The office of the U.S. Trade Representative said it had held aproductive meeting with South Korea on Friday.

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