China has quietly waived tariffs on a range of U.S. imports, including ethane, semiconductors, and pharmaceutical products, in a move that highlights Beijing's mounting economic pressure amid a protracted trade war with the United States. The exemptions, not publicly announced, were disclosed by sources familiar with internal policy discussions and mark a significant shift in Beijing's retaliatory strategy under intensifying strain from President Donald Trump's tariff escalation.
Reuters first reported that Chinese authorities had notified domestic importers that the 125% tariff on U.S. ethane, imposed earlier this month, would no longer apply. China buys nearly half of all U.S. ethane exports, which reached a record 492,000 barrels per day in 2024, according to the U.S. Energy Information Administration. Key Chinese buyers include Satellite Chemical, SP Chemicals, Sinopec, Sanjiang Fine Chemical, and Wanhua Chemical Group, while top U.S. suppliers are Enterprise Products Partners and Energy Transfer.
In addition to ethane, exemptions have been granted on select semiconductor, aerospace, and pharmaceutical imports. Though Beijing has maintained a combative tone publicly, the move to establish an unpublished "whitelist" of exempted goods indicates an effort to insulate critical sectors of its economy from the broader trade clash.
"China doesn't need to talk to the U.S. until it takes meaningful measures," stated a post from Yuyuantantian, a Weibo account tied to China Central Television. But the post also noted that "from a negotiation standpoint, the U.S. is clearly the more anxious party at the moment."
Despite Beijing's messaging, the waivers come as China's export-reliant manufacturing sector begins to feel the impact. The official manufacturing purchasing managers index dropped to a 16-month low of 49 in April, down from 50.5 in March. A reading below 50 indicates contraction. A separate Caixin survey registered a similar decline, with the index falling to 50.4 from 51.2.
Zichun Huang, an economist at Capital Economics, noted, "The sharp drop in the PMIs likely overstates the impact of tariffs due to negative sentiment effects, but it still suggests that China's economy is coming under pressure as external demand cools."
Trump's administration has levied tariffs as high as 145% on Chinese imports, following an initial April 2 announcement targeting countries it accuses of exploiting the U.S. trade system. China responded with its own 125% tariffs and export controls on key minerals such as tungsten, tellurium, and molybdenum, classified by the U.S. Geological Survey as critical to national security and vulnerable to disruption.
Treasury Secretary Scott Bessent said Tuesday the administration's approach is working. "I've seen some very large numbers over the past few days that show if these numbers stay on, Chinese [companies] could lose 10 million jobs very quickly," Bessent told reporters. "Even if there is a drop in the tariffs that they could lose 5 million jobs."
"The onus will be on them to take off these tariffs," Bessent added. "They're unsustainable for them."
On April 29, the Chinese Commerce Ministry urged Washington to reverse course. "The U.S. should abandon its zero-sum approach, immediately withdraw its unilateral tariff measures, return to the path of dialogue and cooperation," it posted.
China's Ministry of Commerce has not officially commented on the ethane waiver, and the exemptions were communicated privately to importers without a formal announcement.
