China exempts $40 billion in US goods from tariffs amid trade war pressure: Report

In a notable shift amid escalating trade tensions, China has begun exempting a tranche of American goods from its punitive tariffs an exemption that spans approximately $40 billion in imports, Bloomberg reported citing sources. The move is seen as a strategic effort to shield China’s economy from further damage as the trade war with the United States deepens.

The exemptions apply to 131 products, including pharmaceuticals and industrial chemicals — categories that underscore China’s continued dependence on specific US imports, the report added. By carving out these exceptions, Beijing appears to be prioritizing economic stability over hardline retaliation.

According to Bloomberg's analysis, the exempted goods account for roughly 24% of China’s total imports from the US in 2024. The decision mirrors tactics previously used by the Trump administration, which spared consumer electronics like smartphones from equivalent retaliatory measures, despite implementing tariffs as steep as 145% on Chinese goods.

The exemption coincides with a potential diplomatic opening. China has signaled a tentative willingness to resume trade negotiations with the US — the first such indication since last month's spike in tariffs. “The US has recently sent messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this,” China’s Commerce Ministry stated on Friday. It emphasized, however, that while it remains open to dialogue, it is equally prepared to “fight to the end” if further provoked.

The broader tariff environment remains severe. The US continues to impose historically high duties on Chinese imports, culminating in a 145% rate that evolved through successive hikes — starting at 20% and escalating through 34%, 84%, 104%, and 125%. Exemptions remain limited, targeting only essential sectors such as semiconductors, pharmaceuticals, and select minerals.