AsianFin -- China is considering lifting its steep 125% tariffs on select U.S. imports as mounting economic costs from the ongoing trade war strain key industries, according to people familiar with the matter.

The potential exemptions could apply to medical equipment and certain industrial chemicals such as ethane, the sources said, speaking on condition of anonymity due to the sensitivity of the discussions.

Officials are also exploring the option of waiving tariffs on aircraft leases, the people added. Like many global carriers, Chinese airlines often lease rather than own aircraft outright — and the added tariffs would significantly raise operating costs.

News of the possible exemptions helped lift market sentiment, with Asian equities advancing and the yuan recovering earlier losses.