China Considers Exempting Some U.S. Goods from Tariffs: Medical Equipment and Industrial Chemicals on the List, Aviation Sector Could Benefit

Taiwan • Business • 04/25 09:02
China Considers Exempting Some U.S. Goods from Tariffs: Medical Equipment and Industrial Chemicals on the List, Aviation Sector Could Benefit

The Chinese government is considering suspending the collection of retaliatory tariffs of up to 125% on certain U.S. imports, with the exemption list including medical equipment, industrial chemicals such as ethane, and aircraft leasing. This move could ease cost pressures on China's aviation and manufacturing sectors. Although the Chinese Ministry of Foreign Affairs has not yet officially confirmed this, companies have been requested to submit product customs codes, indicating that policy adjustments are in progress.

Key Updates

04/26 03:29

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04/25 09:02

China Considers Exempting Some U.S. Goods from Tariffs: Medical Equipment and Industrial Chemicals on the List, Aviation Sector Could Benefit

The Chinese government is considering suspending the collection of retaliatory tariffs of up to 125% on certain U.S. imports, with the exemption list including medical equipment, industrial chemicals such as ethane, and aircraft leasing. This move could ease cost pressures on China's aviation and manufacturing sectors. Although the Chinese Ministry of Foreign Affairs has not yet officially confirmed this, companies have been requested to submit product customs codes, indicating that policy adjustments are in progress.

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The United States is considering waiving tariffs on auto parts, opening up new export opportunities for manufacturers in Taiwan.

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Exemption List Takes Shape: Medical Equipment and Ethane in Focus

According to reports from Bloomberg and Reuters, a task force from China's Ministry of Commerce is collecting lists of U.S. imported goods submitted by companies to assess which items may receive tariff exemptions. A list currently in circulation that includes 131 product categories covers key imports such as vaccines, chemicals, and aircraft engines.

Among them, medical equipment and ethane are frequently mentioned as priority exemption items. China's healthcare system heavily relies on advanced equipment manufactured in the U.S., such as MRI and ultrasound machines, with major suppliers including American companies like GE Healthcare. Maintaining high tariffs would directly increase procurement costs for medical institutions, thereby impacting patients' access to healthcare.

Ethane is a crucial raw material for China's plastics and chemical industries. As the world's largest plastic producer, some Chinese factories depend on importing ethane from the U.S. Ethane is not only used in the production of polyethylene and other plastic products but also widely applied in industrial uses such as fertilizers, solvents, and refrigerants. Imposing a 125% tariff on ethane would cause a ripple effect on the entire manufacturing sector.

Semiconductor Products Partially Included, but Memory Chips Excluded

China's Caijing magazine cited sources indicating that Beijing is also considering including eight semiconductor-related products in the exemption list, but excluding memory chips. This choice reflects China's attempt to balance maintaining a stable technology supply chain with trade countermeasures.

According to reports from CNN and Bloomberg, import agencies in the Shenzhen area have discovered during customs declaration processes that some U.S. semiconductor products have quietly been exempted from the new tariffs. These products mainly cover integrated circuits and chip manufacturing parts, but do not include memory categories.

Aviation Industry Benefits: Aircraft Leasing Fees May Be Tax-Free

China's aviation industry could also be a direct beneficiary of this tariff exemption. Multiple media reports indicate that the Chinese government is considering removing additional tariffs on aircraft leasing. Since most Chinese airlines do not own their entire fleets but lease aircraft through third-party companies, a 125% tariff on leasing fees would place significant financial pressure on airlines.

According to Bloomberg, at least one Chinese airline has been notified that companies located in free trade zones will not be subject to the new tariffs when paying aircraft leasing fees. If this policy is fully implemented, it will help stabilize operating costs in the aviation industry, especially given that American-made aircraft like Boeing still account for a significant portion of China's fleet.

Policy Not Yet Officially Announced, Foreign Ministry Responds Cautiously

Despite multiple sources indicating that the Chinese government is actively working on drafting an exemption list, as of now, the Chinese Ministry of Foreign Affairs and Ministry of Finance have not made any official announcements. A Foreign Ministry spokesperson stated they were "unaware of the relevant plans" and suggested that media inquiries be directed to the relevant departments.

Michael Hart, President of the American Chamber of Commerce in China (AmCham China), revealed that some member companies have not been subjected to new tariffs on U.S. goods imported in the past week, suggesting that exemption measures may have been quietly implemented in certain areas. He noted that the Chinese government has asked American companies which goods cannot be substituted from other countries as a basis for exemption evaluation.

Companies Involved in List Formulation, Exemption List Still in Flux

According to multiple media reports, the Chinese government has asked companies to submit customs codes for U.S. goods they wish to be exempted from tariffs. This move indicates that the exemption policy will be guided by industry needs and may be adjusted based on company feedback.

The circulating exemption list has not yet been officially confirmed, and its content may still change. According to analysis by Huatai Securities, the goods covered by this list correspond to an import value of approximately $45 billion in 2024, highlighting its significant potential economic impact.

References

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