US delays tariffs on some Chinese goods

Trump says decision was driven by a desire to avoid hurting United States shoppers heading into Christmas holiday.

    The office of US Trade Representative Robert Lighthizer (left) on Tuesday announced a list of Chinese goods exempt from a fresh round of tariffs slated to take effect next month [File: Ng Han Guan/Pool via Reuters]
    The office of US Trade Representative Robert Lighthizer (left) on Tuesday announced a list of Chinese goods exempt from a fresh round of tariffs slated to take effect next month [File: Ng Han Guan/Pool via Reuters]

    In an abrupt pullback from its hardline trade war stance with Beijing, the administration of United States President Donald Trump on Tuesday delayed imposing a 10 percent import tariff on laptops, mobile phones, video game consoles and a wide range of other products made in China.

    The action by the office of the US Trade Representative (USTR) was published just minutes after China's Ministry of Commerce said Vice Premier Liu He conducted a phone call with US trade officials.

    Trump said on Tuesday that a desire to avoid hurting US shoppers heading into the Christmas holiday was behind the decision. 

    "We're doing this for the Christmas season" to avoid any adverse impact on US shoppers, Trump told reporters as he prepared to leave the state of New Jersey for an event in Pittsburgh. 

    The delay in the tariffs that had been scheduled to start next month provides some relief to US retailers. 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 Trump said on August 1 that he would impose a 10 percent tariff on $300bn 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 percent tariffs on much of the $300bn list first disclosed in May, publishing a 122-page list of products that will face tariffs beginning September 1, including smartwatches.

    Since Trump's August 1 tweets threatening the new tariffs, the US benchmark S&P 500 stock index has dropped more than four percent.

    On Tuesday, technology investors welcomed news of the exemptions, pushing an index of chip stocks up 3.1 percent, while shares of Apple surged more than five percent. The Dow Jones Industrial Average rose more than 500 points.

    The exemptions, combined with renewed talks with China, suggest Trump may be willing to compromise.

    In a sign the administration may be expecting something in return, Trump tweeted on Tuesday: "As usual, China said they were going to be buying 'big' from our great American Farmers. So far they have not done what they said. Maybe this will be different!"

    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 USTR said in a statement.

    The Retail Industry Leaders Association said, "removing some products from the list and delaying additional 10 percent tariffs on other products, such as toys, consumer electronics, apparel and footwear, until December 15 is welcomed news as it will mitigate some pain for consumers through the holiday season".

    The 21-page list of products that won't get hit with tariffs until December includes baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, musical instruments, ketchup dispensers, baby diapers, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers and food products.

    USTR is still moving forward with tariffs on September 1 on many products such as live animals, dairy products, skis, golf balls, contact lenses, motorcycle engines, lithium-ion batteries, snowblowers and various types of steel.

    A separate group of products will also be exempt altogether, "based on health, safety, national security and other factors," it added.

    The announcement comes amid growing concerns about a global economic slowdown. Goldman Sachs said on Sunday that 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.

    Mobile phones, laptop and tablet computers, toys and video game controllers were among the top four product categories in the proposed $300bn list of products targeted by the latest 10 percent tariff. These products accounted for a combined $98bn of Chinese imports in 2018, according to a Reuters analysis of US Census Bureau data.

    Trump has also personally criticised Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdosing crisis in the US.

    The USTR office plans to conduct an exclusion process for products subject to the additional tariff.

    SOURCE: Reuters news agency