China has excluded certain U.S. imports from its high tariffs, indicating that the trade tensions between the two leading economies might be lessening. However, Beijing quickly dismissed President Donald Trump’s claim that talks were occurring.
On Friday, business groups reported that China had permitted some American pharmaceuticals to be imported without incurring the 125 percent tariffs instituted earlier this month, which were a reaction to Trump’s 145 percent tariffs on U.S. goods.
In addition, a list of 131 products under review for possible tariff exemptions has been circulating among various businesses and trade organizations.
Reuters could not confirm the accuracy of this list, which reportedly includes vaccines, chemicals, and jet engines, as China has yet to officially address the matter.
Recently, Trump’s administration has indicated a desire to de-escalate tensions with China. Trump mentioned in an interview with TIME magazine that discussions were occurring and that Chinese President Xi Jinping had contacted him.
He remarked, “I don’t think it’s a sign of weakness on his behalf.”
In contrast, China has denied any negotiations are taking place.
The Chinese Embassy in Washington stated on social media, “China and the US are NOT having any consultation or negotiation on #tariffs. The US should stop creating confusion.” Alongside the hefty tariffs on China, Trump has also put targeted tariffs on several other countries, which he has postponed until July 9.
This has led to a rush among U.S. trading partners to finalize individual trade agreements with Washington before the deadline—a challenging task, as past negotiations have often spanned years.
Trump informed reporters at the White House that a deal with Japan is very close. Analysts view this as a “test case” for future bilateral trade negotiations, even though talks may be complicated.
There are expectations that Prime Minister Shigeru Ishiba and Trump will announce an agreement during their meeting at the G7 summit in Canada this June.
In a separate comment to TIME, Trump claimed he had finalized “200 deals” that would be accomplished within three to four weeks, although he did not provide further details.
He stated he would consider it a “total victory” if tariffs remained between 20 percent to 50 percent a year from now. Trump believes that his trade barriers will help rejuvenate U.S. manufacturing that has been impacted by global competition.
However, economists largely caution that these tariffs could raise prices for American consumers and increase the likelihood of a recession.
Since Trump took office in January, U.S. stocks have dropped about 10 percent, trailing behind other countries’ markets, while the dollar has seen a significant decline.
European and Asian markets were headed for the second consecutive week of gains on Friday, and the dollar was poised for its first weekly increase in over a month, as investors felt reassured by signs that the U.S. and China might be stepping back from their trade conflict. Wall Street’s main indexes slightly increased as investors sought clarity on the U.S.-China trade situation.
Apart from the country-specific tariffs, Trump has also implemented a general 10 percent tariff on all other U.S. imports, plus higher tariffs on steel, aluminum, and automobiles. He has also proposed additional tariffs on pharmaceuticals and semiconductors, which could result in U.S. drug prices increasing by as much as 12.9 percent, according to industry estimates.
Trump’s tariffs were a major topic at the recent International Monetary Fund and World Bank spring meetings, where finance ministers sought one-on-one discussions with U.S. Treasury Secretary Scott Bessent.
Bessent described initial negotiations with South Korea as “very successful” on Thursday, which South Korea described as a “good start.” Further talks are planned for the upcoming week.
Switzerland also expressed satisfaction with its first meeting with Bessent. The U.S. trade office indicated that it is “constantly engaged” with Japan and other nations, but noted that Trump has the final say on whether these discussions progress.
Despite the encouragement from IMF chief Kristalina Georgieva, who warned earlier this week about the potential for a severe slowdown in global growth, there has been little indication of meaningful advancements with other countries.
