China exempted some US imports from its high tariffs on Friday in a sign that the trade war between the two countries may be easing, though China quickly dismissed US President Donald Trump's assertion that negotiations were underway.

Business groups said China had allowed some US-made pharmaceutical drugs into the country without paying the 125% tariffs that Beijing imposed earlier this month in response to Trump's 145% tariffs on US imports.

In addition, a list of 131 product categories that were said to be under consideration for exemptions has been circulating among some business and trade groups. Reuters could not verify the list, which includes vaccines, chemicals and jet engines, and China has not communicated publicly about the issue. The Trump administration has signaled in recent days that it wants to ease the confrontation between the world's two largest economies, and Trump himself told TIME magazine that talks were underway and that Chinese President Xi Jinping had called him.

"I don't think it's a sign of weakness," he said.

China has denied that discussions are underway.

"China and the US are NOT having any consultations or negotiations on #tariffs. The US should stop creating confusion," the Chinese Embassy in Washington wrote on social media.

In addition to the steep tariffs on China, Trump has announced targeted tariffs on dozens of other countries, which he has suspended until July 9. That has set off a scramble among US trading partners to reach individual trade deals with Washington before the deadline — a tall order, given that previous trade deals have typically taken years to negotiate.

Trump told reporters at the White House that he was very close to a deal with Japan. It is seen by analysts as a "test case" for other bilateral trade agreements, though talks could be difficult. Some expect Prime Minister Shigeru Ishiba and Trump to announce the pact when they meet at the G7 summit in Canada in June.

Trump separately told TIME that he has made "200 deals" that will be finalized in three to four weeks, though he declined to provide specifics. He said he would consider it a "total victory" if tariffs are still in place a year from now at 20% to 50%.

The U.S. Trade Representative's office said it had a productive meeting with South Korea on Friday.

Trump has argued that his complex trade barriers will revive U.S. manufacturing that has been battered by global competition. But economists generally warn that they will lead to higher prices for U.S. consumers and increase the risk of a recession. In addition to the country-specific tariffs, Trump has imposed a 10% blanket tariff on all other U.S. imports and higher duties on steel, aluminum and autos. He has also imposed additional industry-specific levies on pharmaceuticals and semiconductors. (Newsmaker23)

Source: Reuters