Breakthrough in U.S.-China Tariff War? Reports Suggest China is Preparing an Exemption List

TradingKey - Following continued signals from U.S. President Donald Trump to reduce tariffs in a bid to facilitate trade negotiations, reports indicate that China is considering suspending tariffs on select U.S. goods, including semiconductors, medical equipment, and chemicals.

According to Bloomberg, citing sources familiar with the discussions,  the Chinese government is weighing the removal of tariffs on medical devices,  chemicals such as ethane, and aircraft leasing, as the trade war has imposed significant costs on certain industries.

CNN has also reported similar developments. Semiconductor import agents based in Shenzhen said that when they submitted customs declarations last Thursday, they found that tariffs on memory chips and eight other types of integrated circuits had been reduced to zero.

China’s potential reductions appear to be a response to President Trump’s proposal to significantly lower tariffs on Chinese imports and exempt consumer electronics from new levies. However, these tariff exemptions have not yet been officially confirmed.

Markets are closely watching for the formal start of   U.S.-China tariff negotiations, although conflicting statements from both sides have caused confusion.

On April 24, China’s Foreign Ministry stated that China has not yet entered into consultations or negotiations on tariffs, and no agreement had been reached. That same day, however, President Trump announced that a meeting between the two sides had taken place that morning, confirming that trade talks were already underway.