China waives tariffs on some US goods, but denies Trump’s claim that talks are under way

China exempted some US imports from its steep tariffs in a sign on April 25 that the trade war between the two countries could be easing, though it quickly knocked down US President Donald Trump’s assertion that negotiations were under way.

Business groups said China has allowed some US-made pharmaceuticals to enter the country without paying the 125 per cent duties that Beijing imposed earlier in April in response to Mr Trump’s 145 per cent tariffs on US imports.

Also, a list of 131 product categories said to be under consideration for exemptions was circulating among some businesses and trade groups.

Reuters could not verify the list, which includes vaccines, chemicals and jet engines, and China has not yet communicated publicly on the issue.

Mr Trump’s administration has in recent days signalled it is looking to de-escalate the confrontation between the world’s two largest economies, and Mr Trump himself told Time magazine that talks were taking place and

that Chinese President Xi Jinping had called him.

“I don’t think it’s a sign of weakness on his behalf,” he said.

China denied that discussions were happening.

“China and the US are NOT having any consultation or negotiation on #tariffs. The US should stop creating confusion,” the Chinese Embassy in Washington wrote on social media. 

In addition to the steep tariffs on China, Mr Trump has announced targeted tariffs on dozens of other countries, which he has suspended until July 9.

That has set off a scramble among US trading partners to strike individual trade deals with Washington before the deadline – a tall order, given that past trade deals have typically taken years to negotiate. 

Mr Trump told reporters at the White House that he was very close to a deal with Japan. That is seen by analysts as a “test case” for other bilateral trade agreements, though talks could be difficult.

Some expect Prime Minister Shigeru Ishiba and Mr Trump to announce a pact when they meet at the G7 summit in Canada in June. 

Mr Trump separately told Time that he had made “200 deals” that would be completed within three to four weeks, though he declined to provide specifics.

He said

he would consider it a “total victory”

if tariffs were still 20 per cent to 50 per cent a year from 2025.

The office of the US Trade Representative said it had held a productive meeting with South Korea on April 25.

Mr Trump has argued that his thicket of trade barriers will revive US manufacturing industries that have been hollowed out by global competition.

Economists, however, broadly warn that they would lead to higher prices for US consumers and increase the risk of recession.

In addition to the country-specific tariffs, Mr Trump has also imposed a blanket 10 per cent tariff on all other US imports and higher duties on steel, aluminium and autos.

He has also floated additional industry-specific levies on pharmaceuticals and semiconductors. 

European and Asian stocks headed for a second straight week of gains on April 25 and the dollar eyed its first weekly rise in more than a month, as investors took comfort from signs the US and China were prepared to pull back from their trade war. Wall Street’s main indexes opened slightly lower. REUTERS