Stocks rose quickly Tuesday when the Trump Administration announced a delay until Dec. 15 on some planned tariffs affecting smartphones, laptops and toys.
The U.S. Trade Representative’s office announced the delay on certain items after the administration had threatened on Aug. 1 to add 10% tariffs on $300 billion in Chinese imports of mainly consumer goods. Those tariffs were expected to take effect Sept. 1 on top of 25% tariffs on $250 billion in imports from China.
Some products will be removed from tariff lists completely, the USTR said, based on health, safety and national security. The list of items excluded until Dec. 15 includes cellphones and laptops which as a group total about $80 billion in trade. Other items are video game consoles, some toys and some footwear and clothing.
The Dow rose 400 points on the news on Tuesday afternoon, and Apple stock bumped up 4%, while the overall Nasdaq Composite rose 1.9%. “It’s a very promising step forward,” said U.S. Chamber of Commerce CEO Tom Donohue in comments on CNBC. He predicted more adjustments on tariffs will be coming and argued that both the U.S. and China need important goods from each other.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin joined a phone call on Tuesday with Chinese Vice Premier Liu He about trade talks. President Trump termed their conversation a “very good call” and added that China “would really like to make a deal,” according to comments he made to reporters in Morristown, NJ. He said he delayed the tariffs to avoid an impact on holiday shopping.
The U.S. initiated the call and both sides agreed to talk again by phone in two weeks, according to the Chinese Commerce Ministry. There was no mention of holding in-person talks, which President Trump had earlier said would occur in September.
Stocks hit their worst day of the year on Aug 5 following China’s decision to allow its currency to drop against the dollar in the continuing differences over trade.