According to Bloomberg, China is considering suspending the 125% tariff on some imported goods from the US to reduce economic pressure amid rising costs. This move comes as businesses and industries in the country face significant financial challenges.
Sources close to the matter reveal that the Chinese government is focusing on specific groups of goods and services, including:
- Advanced medical equipment: To support the healthcare sector and reduce imported advanced technology costs.
- Industrial chemicals like ethane: To meet production needs and reduce price pressures in the chemical industry.
- Aircraft leasing services: To reduce financial burdens for Chinese airlines, which are experiencing significant aircraft leasing cost increases.
Additionally, at least 8 semiconductor-related products are also under consideration for tariff exemption. Some Chinese companies have been asked to provide HS code lists for items seeking this preferential policy.
The decision to consider tariff exemptions comes as China seeks to reduce domestic economic pressure and optimize costs for strategic industries. Suspending import tariffs could help:
- Reduce production and operational costs for Chinese businesses.
- Increase competitiveness of high-tech industries, especially in the semiconductor sector.
- Support airlines in managing costs, thereby stabilizing ticket prices and maintaining efficient operations.
This move also reflects the flexibility in China's trade policy, as the country must balance maintaining strict tariff measures with the US and the need to promote domestic economic growth.
If implemented, the tariff exemption policy could provide immediate benefits to Chinese businesses dependent on imported goods and services from the US. However, the scope and duration of this policy have not yet been officially announced. Analysts suggest this could be a strategic move for China to minimize negative impacts from prolonged trade tensions with the US while strengthening the competitive capabilities of key industries.
