April 25, 2025 — China has announced it will grant tariff exemptions on certain U.S. imports that were previously hit with up to 125% duties, according to businesses that have been notified. The move, which signals Beijing’s growing concerns about the economic impact of the ongoing trade war, comes as both sides appear to be exploring ways to ease tensions.
The tariff exemptions, which are being sought by companies across a range of industries, follow a series of conciliatory statements from Washington and mark the most significant indication yet that the world’s two largest economies are willing to de-escalate their trade dispute, which has severely disrupted bilateral trade and raised concerns of a global recession.
Business groups have expressed hope that the tariff exemptions will eventually cover a broad range of industries. Early signs have already lifted market sentiment, with the U.S. dollar seeing a slight uptick and stock markets in Hong Kong and Japan showing gains.
“This could be a potential move to de-escalate tensions,” said Alfredo Montufar-Helu, a senior adviser to the Conference Board’s China Center, a think tank. “But neither side seems eager to initiate formal talks just yet.”
Although China has not officially confirmed the exemptions, sources suggest that the Ministry of Commerce has tasked a special task force with collecting lists of goods that could be eligible for tariff waivers. Companies have been asked to submit requests for the most critical products they need duty-free in order to avoid supply chain disruptions. This initiative follows a meeting where more than 80 foreign companies and business chambers were consulted about the impact of U.S. tariffs on Chinese investments.
Michael Hart, president of the American Chamber of Commerce in China, revealed that the Chinese government has been asking businesses which U.S. goods they rely on and cannot source from elsewhere. He pointed out that some pharmaceutical companies have reported receiving tariff exemptions for certain drugs. However, he noted that these exemptions appear to be more targeted, rather than industry-wide.
The CEO of French aerospace giant Safran confirmed that it had been notified about tariff exemptions on “a number of aerospace parts,” including jet engines and landing gear, signaling that such relief could extend across critical industries.
For many companies operating in China, the exemption could provide relief from rising costs and logistical strain. However, the move also aligns with the broader context of ongoing negotiations, as U.S. President Donald Trump recently claimed that talks were happening between Washington and Beijing regarding tariffs. Trump’s comments came in a TIME magazine interview where he stated that Chinese President Xi Jinping had called him. However, Beijing has denied that any formal discussions are currently underway, casting doubt on the U.S. characterization of the talks.
Despite these tensions, equity markets largely remained unaffected by Trump’s interview. European stocks stayed in positive territory, while U.S. stock futures initially surged but then leveled off by the close of trading.
In its latest statement, the Politburo—the Communist Party’s top decision-making body—focused on measures to ensure domestic stability, pledging to support industries and workers most affected by tariffs. The message underscored China’s readiness to endure the trade war for the long haul if necessary, further indicating Beijing’s resilience and determination.
The U.S.-China trade conflict has already caused considerable economic strain, particularly with rising unemployment and deflationary pressures within China. Despite a $1 trillion trade surplus in 2024, Beijing relies heavily on key U.S. imports such as ethane for plastic manufacturing and some life-saving pharmaceuticals.
While Washington has hinted at possible tariff exemptions for certain U.S. electronic goods, Beijing has been clear that it expects the U.S. to reduce its 145% tariffs before any meaningful resolution can occur.
As of now, China’s customs and Ministry of Commerce have not commented on the tariff exemption plans, and the Foreign Ministry redirected queries to relevant authorities.
The trade war is far from over, but the recent developments suggest both sides are beginning to explore options to reduce the economic fallout.