Exchange of gunfire's declining (8)
I believe the answer is:
refusing
'declining' is the definition.
('refuse' can be a synonym of 'decline')
'exchange of gunfire's' is the wordplay.
'exchange of' indicates anagramming the letters (I've seen 'exchange' mean this).
'gunfires' anagrammed gives 'REFUSING'.
(Other definitions for refusing that I've seen before include "Saying no, declining" , "Declining, rejecting" , "Turning away" .)