China Slashes 125% Tariffs on Select US Goods—Trade War Thaw or Tactical Retreat?

Beijing blinks first in the tariff standoff—dropping punitive duties on key American imports. Is this de-escalation or just financial theater before the next round?

Behind the headlines: The exemptions target industrial components, not consumer goods—because nothing says ’diplomatic olive branch’ like letting factories save face (and a few million in supply chain costs).

Cynical take: When two economic superpowers play tariff chicken, someone eventually swerves. This time it’s China—but Wall Street’s already pricing in the next collision.

China Exempts Some US Goods as Trade War Concerns Continue

Since the start of April, the global economy has sought to navigate the fallout of an increased risk of a trade war between the US and China. The former introduced its own set of ‘Liberation Day’ tariffs on all trading partners. Moreover, the latter’s retaliatory action led the United States to increase those import duties to a height of 245%.

The ongoing dispute has many concerned, with both sides now taking precautions to protect their economy. Indeed, China has taken that step by exempting some US imports from its 12% tariffs, according to a recent report. Moreover, the move has given many hope that it could be a sign of easing tensions.

“As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,” Conference Board’s China Center think tank advisor Alfredo Mantufar-Helo said. Moreover, they follow the recent admission by the US that the tariff dispute is not sustainable.

US Treasury Secretary Scott Bessent recently signaled to reporters that the United States was open to de-escalation. “As I said yesterday, this is the equivalent of an embargo, and a break between two countries in trade does not suit anyone’s interest,” he said.

Although they have signaled that no substantive talks have taken place, China recently reiterated it is open to negotiations. However, spokesperson Guo Jiakun also denied reports that those negotiations are happening. Moreover, he added, “If it’s a fight, we will fight to the end.”