Friday, August 1, 2025

US Trade with China Update 8-1-25

The US has extended China’s deadline from August 1 to August 12 to give them more time to continue to negotiate the next part of their Deal with the US. The US needs time to build manufacturing capacity. China needs time to adjust to US on-shoring. 

In 2024, China's nominal GDP reached approximately $18.80 trillion US dollars. In 2024, China's nominal per capita GDP is estimated to be around $13,287.  In 2024, China's surveyed urban unemployment rate averaged 5.1%. Rural employment rose by 2.2 million. In 2024, China's total goods trade reached a record high, with exports at $3.58 trillion and imports at $2.69 trillion. In 2025, China’s nominal GDP is expected to reach $20 trillion. Inflation is low and deflation is expected. 

China has implemented a list of goods that are exempt from its retaliatory tariffs on U.S. products. 

These exemptions primarily target sectors where China lacks readily available alternatives to U.S.-made products and are viewed as a strategic move to ease the impact of trade disputes on the Chinese economy. 

Key product categories that have been exempted from the tariffs include:

·       Pharmaceuticals: Selected pharmaceuticals and basic pharmaceutical products.

·       Microchips and Semiconductors: Semiconductors, microchips, semiconductor manufacturing equipment, and integrated circuits.

·       Aircraft Engines and Aviation Parts.

·       Laptops and Desktop Computers.

·       Smartphones and Communication Devices.

·       Computer Components and Storage Devices: Parts and accessories for computers, solid-state drives, and flat-panel display modules.

It's important to note:

·       The exemptions primarily apply to retaliatory tariffs, not necessarily all import duties.

·       The exact list of exempted products may not be fully public and has been communicated to some companies privately.

·       China has also established a process for individual importers to apply for exemptions on specific consignments of U.S. products. 

The exemptions on certain products, particularly in the tech sector, reflect China's dependence on American technology and its efforts to mitigate the disruption caused by trade tensions.  

What goods did China exempt from tariffs.

In a move to mitigate the economic fallout from the US-China trade war, China has been implementing tariff exemptions on certain US goods.

Exempted goods

·       Pharmaceuticals: Certain pharmaceuticals have been exempted from the retaliatory tariffs, according to Reuters.

·       Microchips: Some microchips and chipmaking equipment have also been included on the exemption list.

·       Aircraft engines and parts: Aircraft engines and aviation parts are another category of goods enjoying tariff exemptions.

·       Other critical goods: China is also reportedly asking companies to identify other critical goods they need to be exempted from tariffs. 

Scope and purpose

·       The exemptions reportedly cover approximately $40 billion worth of imports, representing roughly a quarter of all US imports, according to Bloomberg AI analysis.

·       The goal is to ease the economic impact of the tariffs on Chinese businesses and industries reliant on these US products, reports Newsweek.

·       The exemptions also highlight areas where China still lacks domestic alternatives and relies on American products. 

Note: While some of these exemptions have been confirmed by companies and sources familiar with the matter, China has not made a public and comprehensive announcement on the tariff exemption list. The move is seen as a strategic effort to soften the trade war's blow, rather than a gesture of goodwill, says Bloomberg

https://www.google.com/search?q=what+goods+did+china+exempt+from+tariffs

Comments

The US and China are engaged in Trade Deal discussions concentrating on ensuring that short-term needs are met. The US needs years to build modern manufacturing plants. China needs exports to the US until it can attract other trading partners.

Norb Leahy, Dunwoody GA Tea Party Leader

 

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