Safran says China to exempt jet engines and parts from tariffs

PARIS (Reuters) -China has decided to grant exemptions from import tariffs for some aircraft parts, including jet engines, the head of French engine maker Safran said on Friday.

"We learned last night that China has taken the decision not to tax engines or landing gear or nacelles (engine housings), in other words a certain number of aerospace equipment parts," CEO Olivier Andries told reporters on a first-quarter results call.

"It demonstrates that the situation is very fluid," he said, adding that finished aircraft were not included in the decision.

China is considering exempting some U.S. imports from its 125% tariffs and is asking businesses to identify goods that could be eligible, business groups in China said on Friday.

The possible dispensation is the latest sign the world's two largest economies are prepared to try to calm a trade war that has seen Boeing repatriate some undelivered jets and threaten to sell jets locked out of China to other airlines.

Together with GE Aerospace, Safran co-produces LEAP jet engines for best-selling Boeing and Airbus narrow-body jets as well as China's COMAC C919 jetliner.

Factories are based in France and the United States and GE and Safran are responsible for different parts of the engine, which is the sole powerplant available on the Boeing 737 MAX and competes with U.S.-based Pratt & Whitney on the Airbus A320neo.

A list of 131 categories of products eligible for exemptions was circulating widely on social media and among businesses and trade groups in China on Friday.

Reuters could not verify the list, whose items ranged from vaccines and chemicals to jet engines.

(Reporting by Tim Hepher, Additional reporting by Brenda GohEditing by David Goodman and Barbara Lewis)