According to a Bloomberg report citing anonymous sources, China is preparing to pause its 125% tariffs on certain US imports, including medical equipment, ethane, and aircraft leasing.
The decision is being discussed as both economic pressure and trade friction intensify. Officials involved are also allegedly reviewing a full waiver for tariffs on plane leases, as part of a wider conversation around easing restrictions. This development came after comments made on Thursday by President Donald Trump, who confirmed that members of his administration had been holding meetings with Chinese officials regarding trade.
Trump made the statement during a joint press event with Norwegian Prime Minister Jonas Gahr Støre. When asked which officials were involved in the discussions, he said, “It doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.”
China reportedly set to pause tariffs as PBOC injects cash into the economy
The White House has been pushing forward with trade talks, and the People’s Bank of China responded to mounting economic stress by injecting 600 billion yuan, worth about $82.3 billion, into the financial system on Friday using its one-year medium-term lending facility. The move came as a result of the impact of rising US tariffs, which is as high as 145%. After factoring out expiring loans, this means a net increase of 500 billion yuan for April, the highest monthly liquidity boost since December 2023.
In its statement, the PBoC said that the operation is meant to maintain “ample liquidity” in the system. Wang Qing, chief macro analyst at Golden Credit Rating, said the decision indicates a monetary policy that aims to stay supportive under growing trade pressure. “This is also to ensure liquidity conditions remain ample when the government’s fundraising via special government debt issuances gathers pace,” Wang said.
The PBOC had already been facing calls to loosen its policy. Investors have been demanding stronger support measures as the Chinese economy faces both external trade hurdles and internal funding needs. The fresh liquidity could also help banks handle the increased demand for cash during the early May holidays and back the launch of special bonds that started this week.
Last month, the central bank adjusted how the MLF rate is set. It now allows banks to submit bids at different price points instead of relying on one fixed rate. At the same time, the PBOC has stopped announcing the cost of these one-year loans altogether. These changes are part of a shift toward managing the economy through shorter-term interest rates while maintaining what officials call a “moderately loose” stance.
The return of a large-scale MLF injection was unexpected. In recent months, the PBOC has been trying to reduce reliance on the tool, often replacing it with three- to six-month reverse repurchase agreements. But this April, 1.7 trillion yuan worth of reverse repos are set to mature, the largest monthly total since the tool was introduced in October.