The exemptions signal that, like Washington, Beijing is deeply concerned about the economic pain rippling across the country as the world’s two largest economies decouple.
While Washington has said the current status quo is economically untenable and already offered tariff exemptions to some electronic goods, China has repeatedly said it is willing to fight to the end unless the US lifts its tariffs.
But beneath the bombast, China’s economy is entering the trade war flirting with deflation. Demand is weak and consumer spending and sentiment have never properly recovered from the pandemic levels.
The government is pushing tariff-hit exporters to pivot to local markets, but companies say profits are lower, demand weaker and customers less reliable.
Exemptions are a bigger gesture of support, although by allowing some trade to resume, they also reduce the pain for the US economy and take some pressure off the White House.
