China may suspend 125% tariffs on some US imports - Bloomberg
Photo: The list of exceptions is still under development (Getty Images)
The Chinese government is considering suspending the 125% tariff on certain goods from the United States. The decision is being discussed against the backdrop of economic losses faced by some industries due to mutual trade restrictions, Bloomberg reports.
According to sources, the authorities are considering lifting additional tariffs on medical equipment and some industrial chemicals, such as ethane.
There is also discussion about the possibility of exempting lease payments for aircraft from tariffs. Like many airlines worldwide, Chinese carriers do not own their entire fleets and lease some of their planes from third-party companies. Therefore, the payments would become financially ruinous considering the additional tariffs.
The exemptions under consideration by China reflect similar steps taken by the United States, which in early April lifted the 145% tariff on electronics from China. Both sides are making concessions, highlighting how deeply intertwined the world's two largest economies are, while some key industries have come to a halt following the escalation of the trade war.
According to Bloomberg, the list of exemptions is still in development, and the discussions may not progress. Sources say that companies from vulnerable sectors have received a request from the authorities to provide customs codes for US goods that need to be exempted from the new tariffs. One of the sources said that at least one Chinese company has already been informed that lease payments to companies from free trade zones will not be subject to the new levy.
Traders have also circulated alleged lists of customs codes supposedly exempt from tariffs, which correspond to key chemicals and components for chip production. However, Bloomberg News was unable to verify the authenticity of these lists.
According to an article by Caijing on Friday, Beijing is also preparing to cancel additional tariffs on at least eight categories of semiconductor-related products. However, it is specified that memory chips are not included in the list - which could deal a blow to Micron Technology Inc., the world's third-largest manufacturer of such chips.
In recent days, US President Donald Trump said that tariffs on Chinese goods would "come down substantially" but not canceled completely.
Furthermore, the WSJ reported that some levies could be reduced by more than half.
