China is quietly exempting many U.S. imports from its retaliatory tariffs, signaling that its economy is feeling the strain of the trade war with the Trump administration, Bloomberg reported Friday.

According to a list circulating among businesses, 131 products—including pharmaceuticals and industrial chemicals—are entering China duty-free, despite the official tariff. Those 131 items represent about 24% of U.S. exports to China, roughly $40 billion in trade.

The report comes shortly after U.S. Treasury Secretary Scott Bessent said that China’s economy “is slowing down substantially,” adding, “They are the most unbalanced, imbalanced economy in the history of the world.”

“We saw some very poor [gross domestic product] numbers out of China yesterday. We’re now seeing very large estimates of job growth loss from 5 to 10 million jobs,” Bessent told Fox Business host Maria Bartiromo on “Mornings with Maria” on Thursday. “So the Chinese economy is slowing down substantially here. So, what we will first want to see is a de-escalation.”

Bessent added that the trade war is “not sustainable on the Chinese side.”

China remained defiant after Trump increased tariffs on its goods to 145%, retaliating with a 125% tariff on American imports and vowing not to yield to “pressure, threats, and blackmail.” Yet, just as Trump exempted certain electronics, like smartphones, from his additional China tariff, Beijing is quietly easing the impact of its own duties to shield its economy.

The exemptions may also help defuse U.S.-China tensions as the Trump administration presses for trade talks. Last month, President Trump said China had approached the U.S. “a number of times” about negotiations and suggested that, even without a deal, the tariffs would eventually resolve themselves. This week, Beijing confirmed that the White House has indeed reached out, “hoping to start talks with China.”