Xi Jinping has announced a plan to counter China’s continuing economic problems and the impact of the US trade war, as reports swirl that it could drop tariffs on some US products, including semiconductors.
Friday’s meeting of the politburo was convened to discuss China’s economic situation, which since the pandemic has faced difficulties fuelled by a housing sector crisis, youth unemployment, and Donald Trump’s tariffs on all Chinese exports.
A readout of the meeting published by the official state media outlet, Xinhua, said China’s economy had showed a “positive trend” with increasing social confidence in 2025, but “the impact of external shocks has increased”.
“We must strengthen bottom-line thinking, fully prepare emergency plans, and do a solid job in economic work,” it said.
In a reference to Trump’s global tariffs, the readout said Beijing would “work with the international community to actively uphold multilateralism and oppose unilateral bullying practices”.
The readout proposed a series of interventions to bolster the domestic economy and protect people and businesses from the impact of Trump’s tariffs, including increasing unemployment insurance payouts. It promised to increase low and middle incomes, develop the service industry and boost consumption.
“We should take multiple measures to help enterprises in difficulties,” it said. “We should strengthen financing support. We should accelerate the integration of domestic and foreign trade.”
It stressed the need for more proactive macroeconomic policies, faster development of a new real estate model and increased housing stock, and “stepping up” city renewal programmes and urban renovation.
Wen-ti Sung, a non-resident fellow at the Atlantic Council’s Global China Hub, said the politburo’s decisions showed Beijing “clearly views the international macroeconomic environment as hostile” and was willing to take on high domestic inflation to weather the tariffs.
“[This] hints that China will be digging into the trenches and is preparing for a long trade fight with Trump.”
Sung said Beijing was “doubling down on boosting domestic demand” and bolstering fiscal stimulus, as the international market showed no signs of significant improvement.
The meeting was held amid reports that Chinese authorities were considering a list of US products to exempt from the 125% tariffs imposed on all US imports. Earlier reports from Bloomberg and Reuters said medical equipment, semiconductors and some industrial chemicals such as ethane were being considered.
On Thursday, a Shenzhen-based supplier posted online that it had been notified by the customs agency that eight semiconductor products would no longer attract the 125% duty.
On Friday, the head of the American Chamber of Commerce in China, Michael Hart, said the Chinese authorities had been asking members what products they imported from the US that they could not find anywhere else.
He welcomed the early signs that both sides were reviewing tariffs and starting to produce lists of excluded items. Stock markets across the Asia-Pacific region rose after the reports.
The trade war has hit the US and Chinese economies, and the tariff exemptions are a likely sign of the parties trying to ease their ways out. The US had already exempted some categories of Chinese-made products from tariffs, including smartphones and laptops. This week Trump said his tariffs on China would “come down substantially but it won’t be zero”.
But in public the two governments have given different accounts on the status of negotiations on ending the trade war.
On Friday afternoon, China’s foreign ministry reiterated its claim that the US and China are not engaged in any negotiations on tariffs, contradicting Trump’s claims on Thursday.
Speaking to reporters at the White House, Trump said the two sides were talking. “We may reveal it later, but they had meetings this morning, and we’ve been meeting with China,” the US president said, declining to say who “they” were.
The remarks appeared to be in response to the Chinese commerce ministry’s spokesperson, He Yadong, who earlier said there were “currently no economic and trade negotiations between China and the United States”.
