14 Aug 2019
Washington has refrained from imposing tariffs on certain products from China such as laptops and mobile phones.
The move has met with the approval of global markets.
Earlier this month, the White House affirmed it would apply 10% levies on $300bn of Chinese goods, meaning nearly all imports from the People’s Republic would be hit with tariffs.
However, the U.S. trade representative’s office confirmed in a statement on Tuesday that tariffs would be delayed until mid-December for products such as “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”
It added: “Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10%”
It was confirmed after Liu He, China’s vice premier, spoke with Robert Lighthizer, U.S. trade official and Steven Mnuchin, the U.S. Treasury secretary, by phone with an agreement to have another discussion in two weeks.
The announcement sent U.S. equities upwards having opened down. The tech-heavy Nasdaq index rose 2.5% and the Dow Jones industrial average and S&P 500 both climbed 1.9%.
European stock markets were given a boost on the news.
Speaking to the FT, Michael Kagan, portfolio manager with ClearBridge Investments, said: “Stocks were oversold so the reaction to the tariff delay makes sense. But the more tariffs are put on, the more risk to the global economy — companies don’t know where to invest because they don’t know what the tariffs will be.”
“The consumer facing piece of the tariff exemptions boosted the tech sector, specially companies like Apple which rose 4.75% after the news,” said Alfonso Esparza, senior market analyst at foreign exchange firm Oanda, to CityAM.
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