The Chinese government is considering whether to exclude some important products from the retaliation of 125% tariffs on American goods, the head of the American business group in China said.
Chinese Commerce Department officials have made Chinese companies canvas to identify imports from the US that are essential to chains vulnerable to new US trade barriers.
“If the long-term tariff war continues, their business model won't work in China and there are a few companies that say we'll see them leaving,” Hart said. “We shared it with the Chinese government because they are of course trying to encourage foreign direct investment.”
Life-saving drugs and other healthcare products were among the most obvious sectors of concern, Hart said.
Markets in Asia and Europe rose on Friday as investors look for signs that trade tensions between the two biggest economies in the world are beginning to ease.
Trade tensions pose major challenges to China's economic growth driven by exports. President Trump raised tariffs this month to 145% on more than half of China's exports to the United States.
Some factories in southern China have already halted operations since the beginning of this month, raising concerns about whether unemployment rates could rise in China.
Chinese officials responded by not only imposing extraordinary tariffs on US imports, but also encouraging consumers to purchase products made in China.
However, there are some products that China does not make. China relies on foreign companies for advanced computer chips, and many of the country's high-tech industry hopes that semiconductors will escape tariffs.
There were also indications that China could be forgiven for semiconductor tariffs placed in the US. The Chinese state-backed trade association said this month that even if sold to China by an American company, a significant portion of the advanced tip would be exempt from Chinese tariffs if it was made outside the US.
Many advanced chips are designed by American companies such as Nvidia, Qualcomm, AMD, but are manufactured in Taiwan. The guidance said that for tariff purposes, China will not consider chips like those occurring in the US.
A report spread this week on Chinese media and social media, and Beijing decided not to impose tariffs on US-made semiconductor products. The Chinese government has not issued such policies.
On Thursday, Deep Shenzhen's logistics and warehouse company said on social media that eight chip-related products derived from the US were notified of additional tariffs. Company representatives were unable to confirm the report when they contacted them by phone on Friday.
Caijing, a Chinese business magazine, published a report on the exemptions on Friday morning. The report was deleted within hours.
Guo Zi-Kung, a spokesman for the Chinese Ministry of Foreign Affairs, said he was unfamiliar with the situation when asked at a news briefing on Friday whether China was considering repeating tariffs on US products.
“We're in a situation where we're in an unintended consequence,” Hart said. “The US and China are both doing the same exercise and are beginning to realize that there may have been unintended consequences for businesses and supply chains from tariffs, and I think we're seeing both of us make exceptions.”
siyi Zhao and Joy Don Contributed research.
