China is considering exempting some U.S. imports from its 125 percent tariffs and is asking businesses to identify goods that could be eligible in the biggest sign yet that Beijing is worried about economic fallout in its trade war with Washington.

Levies on certain U.S.-made microchips have been dropped, importers say. Meanwhile, China has denied President Trump’s claims that talks to reduce tariffs are happening.

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.