China is weighing an exemption for some U.S. imports from its tariffs as the economic fallout in its ongoing trade war with Washington becomes more apparent.

China has exempted some U.S. imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout.

China called for all "unilateral" U.S. tariffs to be cancelled on Thursday, as signs emerged that the Trump administration may de-escalate its trade war with Beijing. China also clarified it has not held trade talks with Washington despite repeated comments from the U.

President Donald Trump said his administration was talking with China on trade, after Beijing denied the existence of negotiations on a deal and demanded the US revoke all unilateral tariffs.“They had a meeting this morning,

President Donald Trump asserted on Thursday that trade talks between the U.S. and China are underway, pushing back against Chinese claims that no discussions have taken place to ease the ongoing trade war.