(Reuters) -China has granted tariff exemptions on select pharmaceuticals, microchips and aircraft engines from its 125% retaliatory tariffs on U.S. goods imposed after President Donald Trump unleashed his tariffs in April.

The Trump administration is heading into weekend talks with China contemplating a potentially dramatic tariff reduction in a de-escalatory move that would see both sides slash duties from prohibitive levels set last month to temper the economic pain both are already starting to feel.

Beijing says it will meet with American officials to discuss trade, but warned Washington against using the engagement to ratchet up pressure on China.