China has quietly started to exempt some US goods from tariffs that likely cover around $40 billion worth of imports (or around 24% of Chinese imports from the US in 2024), in what looks like an effort to soften the blow of the trade war on its own economy.
“China is likely trying to mitigate damage to its economy by avoiding a collapse in key imports,” DiPippo said.
“The exemptions shouldn’t be interpreted as a signal to the US, as China has been quiet about its exemptions, working through business channels and avoiding public statements.”
While this move mirrors the shift by the Trump administration – exempting smartphones and other electronics from its own “reciprocal” tariffs, including the 145% levies on China (those US exemptions apply to about $102 billion, or roughly 22% of US imports from China last year) – we suspect there is more behind this decision.