By Andrew Silver
SHANGHAI (Reuters) – China has created a list of products made in the United States that will be exempt from its 125% tariff and quietly informed companies about the policy, two people familiar with the matter, just as Beijing seeks to mitigate the impact of its trade war with Washington.
China has approved tariff exemptions for specific products, including select drugs, microchips and aircraft engines, and requires companies to determine the key commodities they need without fees, Reuters reported on Friday. However, the existence of the so-called “whitelist” has not been reported before.
The quiet approach has led Beijing to repeatedly express willingness to fight until the end unless the United States raises its 145% tariff to maintain its public messaging while taking practical steps privately to provide concessions.
The two sources said it was unclear how many and which products were included in the list and which authorities have not shared publicly, and refused to name the information not disclosed.
Instead, authorities are contacting the company privately and working for a drug company that sells U.S.-made drugs in China, sources said the company’s list of existence would be exempt from tariffs.
Sources said the Shanghai Pudong government contacted the company on Monday, adding that the company had previously lobbied for tariff exemptions because it relied on U.S. technology from certain U.S. products.
“We still have a lot of technology from the United States,” the person said.
Another source said some companies were asked to contact authorities privately to ask whether they are eligible for exemptions for their imported products.
Reuters reported on Tuesday that the list of exempted products also appears to be growing: China exempts tariffs on U.S. ethane imports.
Major Ethane processors have been seeking tariff exemptions from Beijing, as the United States is the only supplier.
U.S. President Donald Trump said Tuesday he believes the trade deal with China is coming soon. “But it will be fair,” he said.
China’s Ministry of Commerce and Customs did not immediately respond to a request for comment.
Measurement impact
Two other sources said China is also investigating companies to assess the impact of the tariff war.
At a recent meeting, authorities in eastern China asked foreign business lobby groups to “communicate all the critical situations caused by tariff tensions to assess specific cases.”
