“Xi’s Counterstrike: China’s Economic Game Plan Unveiled”:

Beijing will ‘strengthen bottom-line thinking’ as reports say it could drop tariffs on some US products

Xi Jinping has announced a plan to counter China’s continuing economic problems and the impact of the US trade war, as there are reports he may ease tariffs on some US products including semiconductors.

The Politburo meeting on Friday was called to discuss China’s economy, which has been facing difficulties since the pandemic hit due to a housing sector crisis, youth unemployment and Donald Trump’s tariffs on all Chinese imports to the US.

Minutes of the meeting published by official state media outlet Xinhua said China’s economy has shown a “positive trend” in 2025 with rising social confidence, but “the impact of external shocks has increased”.

“We should strengthen end-result thinking, fully prepare emergency plans and make solid progress in economic work,” it added.

In 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 US president has again insisted that Xi has called him to discuss border taxes, while Beijing has denied any contact between the two countries over their acrimonious trade dispute.

In an interview with Time magazine conducted on Tuesday and published on Friday, Trump repeated the claim but did not say when the call took place or what was discussed.

“He has called,” Trump said of Xi. “And I don’t think that’s a sign of weakness on his part.”

On Thursday, Chinese Foreign Ministry spokesman Guo Jiakun said of reports of the talks: “None of this is true.” Friday’s politburo readout proposed a number of interventions to strengthen the domestic economy and protect people and businesses from the impact of Trump’s tariffs, including an increase in unemployment insurance payments. It promised to raise low and middle incomes, develop the service industry and boost consumption.

“We should take a series of measures to help enterprises in difficulty,” it said. “We should strengthen financing support.

We should accelerate the integration of domestic and foreign trade.” It stressed the need for more active macroeconomic policies, the rapid development of a new real estate model and increase in housing stock, and “enhancing” city renovation programs and urban renewal.

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 is willing to face higher domestic inflation to deal with tariffs.

“[This] indicates that China is going to dig the trenches and prepare for a long trade battle with Trump,” he said. Sung said Beijing was “doubling down on boosting domestic demand” and boosting fiscal stimulus as the international market shows no signs of significant improvement.

The meeting came amid reports that Chinese officials were considering a list of US products to exempt from the 125% tariff imposed on all US imports.

Earlier reports by 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, Michael Hart, the head of the American Chamber of Commerce in China, said Chinese officials were asking members what products they import from the US that they cannot get elsewhere.

He welcomed early signs that the two sides are reviewing tariffs and starting to draw up a list of excluded goods. Stock markets in the Asia Pacific region rose after the report.

The trade war has hit the US and Chinese economies, and tariff exemptions could be a sign that both sides are trying to find their way 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 be “significantly reduced, but it won’t be zero”.

But publicly the two governments have made different statements about the state of talks on ending the trade war.

On Friday afternoon, China’s foreign ministry reiterated its claim that the US and China were 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 in talks. “We may disclose it later, but they had meetings this morning and we are meeting with China,” he said. He declined to say who “they” were.

The remarks were in response to Chinese Commerce Ministry spokesman He Yadong’s statement earlier that “there are no economic and trade talks between China and the United States at the moment.”