China considers rolling back 125% tariff on key US imports amid trade war

US-China trade war: The rollback would impact key industries such as medical equipment and industrial chemicals

China is weighing the suspension of its 125 per cent tariff on select US imports, according to a Bloomberg report citing people familiar with the matter. The proposed exemptions reflect growing concerns over the toll that the prolonged trade war is taking on critical Chinese industries.

 

The potential tariff cuts would focus on key sectors, such as medical equipment and industrial chemicals like ethane, which is used in plastic production. China is also considering removing tariffs on aircraft leasing payments, a significant cost for domestic airlines. If these tariffs stay, it could make leasing planes too expensive for them.

 

China to remove tariff on semiconductors

China is also reportedly planning to remove tariffs on at least eight semiconductor products, though memory chips, which are made by US company Micron Technology, may not be included. The Chinese government has asked businesses to submit a list of US products they would like to see exempted from tariffs, but no official list has been confirmed yet. 

 

US exempts certain electronics from tariffs

Last week, the Trump administration announced exemptions on electronics — including smartphones, laptops, memory chips, and display panels — from its 145 per cent tariff on Chinese imports.

 

The possible tariff reductions in China highlight the country’s need for US goods in some important sectors. Chinese hospitals rely on advanced US-made medical devices like MRI and ultrasound machines from companies such as GE Healthcare. Some chemical and chip manufacturers also depend on US supplies to keep their operations running smoothly. 

Are US-China trade tensions de-escalating?

While these potential tariff reductions suggest some easing of tensions, China has made it clear that it wants the US to remove all its unilateral tariffs before any future negotiations can happen. 

President Trump has largely changed his tune on China, stating that his administration has been in talks with Beijing ‘every day’. However, on Thursday, the Chinese Foreign Ministry spokesperson denied talks with the US. While both have said they are open to dialogue, little has been reported on the matter and trade talks remain stalled.