Xi Jinping has unveiled a plan aimed at addressing China’s ongoing economic challenges and the effects of the US trade war, amid speculation that China may reduce tariffs on certain US goods, such as semiconductors. The politburo meeting on Friday focused on China’s economic struggles, which have been worsened by a housing sector crisis, high youth unemployment, and US tariffs on all Chinese exports.
According to an official readout from Xinhua, China’s economy showed a “positive trend” with growing public confidence in 2025, but it noted that external shocks have had a greater impact.
The readout stressed the need for “bottom-line thinking” and strong emergency preparedness to manage the economic situation, and indicated that China would work with the international community to oppose “unilateral bullying practices” linked to the global tariffs imposed by President Trump.
To protect businesses and citizens from these effects, China plans to implement measures such as raising unemployment insurance, boosting low- and middle-income levels, expanding the service sector, and encouraging consumption.
The government also emphasized increased financial support for struggling businesses, as well as steps to further integrate domestic and foreign trade.
The meeting underscored the importance of proactive macroeconomic policies, fast-tracking a new real estate model, increasing housing supply, and expanding urban renewal programs.
According to Wen-ti Sung, a non-resident fellow at the Atlantic Council, the decisions highlight China’s view that the global economic environment is increasingly hostile, with the country preparing for a prolonged trade conflict with the US. Sung noted that Beijing is focused on boosting domestic demand and increasing fiscal stimulus due to the lack of improvement in the international market.
Simultaneously, reports surfaced that China was considering a list of US products to exempt from the 125% tariffs imposed on all US imports. Items such as medical equipment, semiconductors, and certain industrial chemicals were reportedly being reviewed for tariff exemptions. A Shenzhen supplier confirmed that eight semiconductor products would no longer be subject to the 125% tariff.
Michael Hart, head of the American Chamber of Commerce in China, also confirmed that Chinese authorities were gathering input from businesses about essential US products. This potential shift in tariff policy led to a rise in stock markets across the Asia-Pacific region.
The US and China are looking for ways to ease the impact of the trade war, with the US already exempting some Chinese-made products, such as smartphones and laptops. This week, Trump suggested that tariffs on China would be reduced, but not entirely removed. However, the US and Chinese governments have offered conflicting statements regarding the status of trade negotiations.
On Friday, China’s foreign ministry reiterated that no formal tariff negotiations were taking place, contrary to Trump’s earlier remarks that talks were ongoing.
