China, Withdrawal of retaliatory tariffs on American semiconductors... Movement to ease trade tension

Xi Jinping Chinese President (Source: AFP)

After President Donald Trump of the United States stated that high tariffs on China could be lowered, signs of easing trade tensions between the two countries are emerging as China quietly withdraws or considers delaying retaliatory tariffs imposed on some U.S. products.

CNN reported on the 25th (local time) that China recently withdrew the 125% additional tariffs imposed on eight types of semiconductors manufactured in the United States. It is reported that the measure was individually notified to companies through customs without an official announcement. Several importers in the Shenzhen area were reportedly late to confirm that tariffs were exempt during the customs process.

Shenzhen-based semiconductor importers Taihang and HJET and others disclosed that they received notification from customs that eight items of integrated circuit-related tariff codes were exempt, and it was also explained that a refund is possible for tariffs already paid. However, it is known that memory chips are not included in the exemptions.

This measure is not limited to semiconductors. Bloomberg reported that the Chinese government is considering delaying tariffs on some U.S. imports such as medical equipment, ethane, and aircraft leasing. This suggests that major industries in China still rely on U.S. materials and equipment, and the cost burden from the trade war is increasing.

Chinese hospitals rely on U.S. companies for advanced medical equipment, such as Magnetic Resonance Imaging (MRI) or ultrasound machines, and also import a substantial amount of the plastic raw material ethane from the U.S. As for aircraft, most are introduced through leasing, raising concerns that continued additional tariffs could increase financial burdens for airlines.

This move is interpreted as a response to President Trump's recent mention of the “possibility of special negotiations with China” and his remarks that a tariff rate of 145% is “very high,” consistently sending conciliatory messages. U.S. Treasury Secretary Scott Basent also mentioned a new trade agreement between the two countries, stating that “current high tariffs are not sustainable.”

As the two countries at the heart of trade conflicts are likely to return to the negotiation table, global attention is focused on how reciprocal measures surrounding tariff relief will materialize in the future. However, China still maintains that the U.S. must withdraw all existing unilateral tariff measures before full-scale negotiations begin.