Tariff Thaw? China Said To Be Eyeing Relief For Some US Goods As Trump Reaffirms Talks With Beijing Are Underway

China appears to have blinked in its ongoing trade tussle with the U.S., with a new report suggesting the former is considering exempting levies for some U.S. goods.

Bloomberg reported, citing people familiar with the matter, that Chinese authorities were considering removing the 125% tariff on items such as medical equipment and some industrial chemicals, such as ethane.

Ethane imported primarily from the U.S. is used by China's burgeoning plastics industry, while the Chinese hospitals use advanced medical equipment supplied by U.S. behemoth GE Healthcare.

China was also reportedly toying with waiving tariffs for plane leases, given levies substantially raise lease costs for carriers using jets from third-party companies.

Following the news, the major  U.S. index futures, which were mixed overnight after a three-session advance, turned uniformly higher.

At last check, the S&P 500 futures and the Nasdaq 100 futures were up 0.40 and 0.46%, respectively, while the Dow futures traded marginally higher.

The yuan received a slight boost on the news, rising 0.06% to 7.2843 versus the dollar. Stock markets in China and Hong Kong also rose as traders assessed the impact of a potential thawing in cold trade relations.

A local news outlet reported Friday that China was willing to waive the additional tariffs on at least eight semiconductor-related products. However, according to the Bloomberg report, the list did not include memory chips.

The news was similar to an earlier move by the U.S., which exempted electronics products from the 145% additional tariffs it eyed.

The latest buzz came after a Chinese foreign ministry spokesperson on Thursday rubbished reports of the country being in trade talks with the U.S. 

"China and the United States have not held consultations or negotiations on the tariff issue, let alone reached an agreement," he said.

That contradicted a previous statement from U.S. President Donald Trump, who was the first to fire a salvo in the ongoing trade war. Trump had said Wednesday that his team was "actively" engaging with Beijing on trade policy.

After China's rebuttal, Trump reaffirmed that talks were ongoing. 

According to a CNBC report, Trump told reporters, "They had a meeting this morning [Thursday]... It doesn't matter who 'they' is. We may reveal it later, but they had meetings this morning, and we've been meeting with China."

The iShares MSCI China ETF (MCHI) ended Thursday's session up 0.60%, while the SPDR S&P 500 ETF (SPY) added 2.10% before closing at $546.69.

So far this year, the MCHI has gained about 11%, while  SPY has shed 6.4%.

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