China may suspend 125% tariffs on some US goods to aid domestic industry: Report

China is considering suspending its 125% retaliatory tariffs on certain US imports, including medical equipment and industrial chemicals, reported Bloomberg News, citing people aware of the matter.

Officials are privately weighing exemptions for items such as ethane, a critical input for China's plastics industry, and high-end medical equipment, according to the report.

The government is also reportedly discussing waiving additional levies on aircraft leasing arrangements. Chinese airlines lease a large portion of their fleets from foreign companies.

The deliberations come amid mounting pressure on industries that depend heavily on US goods, and mirror a recent US decision to exclude electronics from its own 145% tariffs on Chinese imports.

“It’s another step toward a de-escalation of the trade war,” Bloomberg quoted Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities Pte, as saying.

US Treasury Secretary Scott Bessent also recently signalled a possible easing of tensions saying ongoing tariffs showdown against China was unsustainable. Speaking Tuesday in Washington at a private event hosted by JPMorgan Chase, Bessent said he expects a "de-escalation" in the trade war between the world's two largest economies.

However, he noted that formal negotiations had yet to begin.

“I do say China is going to be a slog in terms of the negotiations,” The Associated Press quoted Bessent as saying. “Neither side thinks the status quo is sustainable.”

China remains a leading global manufacturer of plastics but relies on US ethane for production. Chinese hospitals depend on advanced diagnostic equipment from US companies like GE Healthcare Technologies Inc.

The trade war began after US President Donald Trump imposed sweeping tariffs on dozens of countries, including a 145% import tax on Chinese goods. China retaliated with its own 125% levy on US imports. The escalating conflict has rattled markets and raised borrowing costs for the US, as investors grow increasingly concerned about its economic impact.