China exempts some goods from US tariffs to limit trade war pain

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.

The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession.

Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the U.S. dollar up slightly and lifted equity markets in Hong Kong and Japan.

“As a quid-pro-quo move, it could provide a potential way to de-escalate tensions," said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center, a think tank.