Xi announces plan for Chinese economy to counter impact of US trade war
Xi Jinping Unveils Plan to Address China’s Economic Challenges Amid US Trade Tensions
Xi Jinping has laid out new measures to address China’s ongoing economic struggles and soften the blow from the US trade war, amid reports that Beijing may reduce tariffs on some American imports, such as semiconductors.
China’s top political leadership met on Friday to discuss the state of the economy, which has faced mounting pressure in the wake of the pandemic. Issues like a slumping property sector, rising youth unemployment, and sweeping tariffs from Donald Trump on all Chinese exports to the US have all weighed heavily.
A summary of the meeting, released by state news agency Xinhua, claimed that the economy was showing a “positive trend” in 2025 and that public confidence was growing. However, it also warned that “external shocks” were becoming more disruptive.
“We need to enhance our bottom-line thinking, be fully ready with contingency plans, and execute our economic strategies with precision,” the statement said.
In a nod to Trump-era trade policies, the report emphasized China’s intention to work with other nations to support multilateralism and push back against “unilateral bullying.”
Despite this, US President Donald Trump has once again claimed that Xi contacted him about tariffs — a claim Beijing denies. Speaking to Time magazine earlier in the week, Trump repeated that Xi had called him, although he didn’t specify when or what was discussed. “He’s called,” Trump said. “I don’t see that as weakness on his part.”
On Thursday, Chinese foreign ministry spokesperson Guo Jiakun dismissed reports of such conversations, saying, “None of that is true.”
The politburo’s readout on Friday proposed a range of steps to reinforce the domestic economy and shield citizens and businesses from US tariffs. These include raising unemployment benefits, boosting lower- and middle-income earnings, expanding the service sector, and driving consumer spending.
“We must implement a wide array of measures to support struggling businesses,” the statement urged. “Financial support should be strengthened. We should also speed up the integration of domestic and international trade.”
Officials also called for more aggressive macroeconomic policies, a quicker rollout of a new real estate framework, more housing availability, and expanded urban development and renewal projects.
Wen-ti Sung, a non-resident fellow at the Atlantic Council’s Global China Hub, said the meeting reflected China’s view of the global economic environment as increasingly unfriendly. He added that Beijing appears prepared to endure high inflation to weather Trump’s tariffs.
“This suggests China is gearing up for a prolonged economic standoff with Trump,” Sung said, noting the government’s strong focus on increasing domestic demand and expanding fiscal support.
The meeting took place as reports surfaced that Beijing may exempt certain American goods from its 125% tariffs. According to Bloomberg and Reuters, the list could include semiconductors, medical devices, and chemicals like ethane.
A supplier in Shenzhen revealed on Thursday that it had received notice from customs that eight semiconductor products were no longer subject to the steep tariff.
Michael Hart, president of the American Chamber of Commerce in China, said Chinese officials had been surveying US businesses about essential imports they couldn’t source elsewhere. He saw this as a promising sign that both sides were taking early steps toward tariff relief. Stocks across the Asia-Pacific rose on the news.
Both the US and Chinese economies have felt the sting of the trade war, and the easing of some tariffs may indicate a mutual desire to step back from escalation. The US has already lifted tariffs on certain Chinese products, including laptops and smartphones. Trump recently said his tariffs on China “will come down substantially, but it won’t be zero.”
Still, the two nations remain publicly divided on whether negotiations are even taking place. China’s foreign ministry reiterated Friday that no tariff discussions were ongoing, contradicting Trump’s statement a day earlier.
Speaking from the White House, Trump insisted talks were happening. “We might disclose it later, but they had meetings this morning,” he said, offering no details on who was involved.
His comments seemed to counter those from China’s commerce ministry, which had earlier insisted there were “currently no economic and trade negotiations between China and the United States.”