China has created a list of U.S.-made products that would be exempted from its 125% tariffs and is quietly notifying companies about the policy, two people familiar with the matter said, as Beijing seeks to ease the impact of its trade war with Washington.

China has already granted tariff exemptions on select products including select pharmaceuticals, microchips and aircraft engines and was asking firms to identify critical goods they need levy-free, Reuters reported on Friday. However, the existence of a so-called 'whitelist' had not been previously reported.

The quiet approach allows Beijing, which has repeatedly said it is willing to fight till the end unless the U.S. lifts its 145% tariffs, to maintain its public messaging while privately taking practical steps to provide concessions.

It was not immediately clear how many and which products have been included on the list, which authorities have not shared publicly, the two sources said, declining to be named as the information was not public.

Companies instead are being privately contacted by authorities and notified of the existence of a list of product classifications that would be exempted from the tariffs, according to one of the sources who works at a drug company selling U.S.-made medicines in China.

The company was contacted by the Shanghai Pudong government on Monday about the list, the source said, adding the firm had previously lobbied for tariff exemptions as it relies on U.S. technologies for some of its products.

We still have many technologies we need from the U.S.," the person said.

Another source said some companies have been asked to privately contact authorities to inquire if their own imported products qualify for the exemption.

The list of exempted products also appears to be growing: China has waived tariffs on ethane imports from the U.S., Reuters reported on Tuesday.

Major ethane processors had already sought tariff waivers from Beijing because the U.S. is the only supplier.

U.S. President Donald Trump said on Tuesday he thought a trade deal with China was on the horizon. "But it's going to be a fair deal," he said.

China's commerce and customs ministries did not immediately respond to requests for comment.

Two other sources said China is also surveying companies to gauge the impact of the tariff war.

In a recent meeting, authorities in Eastern China asked a foreign business lobby group to "communicate all critical situations caused by tariff tensions to evaluate specific cases," a person with direct knowledge of the matter told Reuters.

Government officials in Xiamen, a city in southeastern Fujian province that is home to a major port and a manufacturing base for electronics, also sent out a survey on Sunday to companies to assess tariff impacts, said a source with direct knowledge of the matter.
The survey was sent to textiles firms and semiconductor companies and included questions on products they trade with the U.S., and the estimated impact of the U.S. and Chinese tariffs on their business

Source: Investing.com