Stock market rallies after decision to delay Trump tariffs on China
Unexpected move in the president's trade war comes as a relief for retailers and investors, with the Dow Jones industrial average gaining more than 500 points
The delay came as an unexpected relief for technology investors, who welcomed the news as shares in Apple surged more than five per cent and the Dow Jones industrial average rose more than 500 points.
Since Mr Trump threatened the new tariffs in a tweet on August 1, the US benchmark S&P stock index had dropped by more than four per cent.
A day before the White House announced the delay, the Dow lost 391 points and the S&P 500 fell nearly 1.2 per cent amid concerns the trade conflict between the US and China would cause a global economic downturn.
The delayed tariffs amount to 10 per cent and would impact laptops, mobile phones, video game consoles and a wide range of other products made in China.
The US trade representative’s office action was published just minutes after China’s ministry of commerce said vice premier Liu He conducted a phone call with US trade officials.
Although most stores would have stocked their holiday merchandise before the earlier September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.
The decision came less than two weeks after Mr Trump said he would impose a 10 per cent tariff on $300bn (£248.7bn) of Chinese goods, blaming China for not following through on promises to buy more American agricultural products.
The administration is still moving forward with 10 per cent tariffs on much of the list first disclosed in May. publishing a 122-page list of products that will face tariffs beginning on September 1, including smartwatches.
Other products that will have tariffs delayed until December 15 include “computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing”, the US trade representative said in a statement.
A separate group of products will also be exempt altogether “based on health, safety, national security and other factors”, it added.
Goldman Sachs said on Sunday fears of the US-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 US presidential election.
Additional reporting by Reuters