US delays Sept tariffs for some Chinese products

Stock numbers for Apple seen on a monitor at the New York Stock Exchange yesterday. Apple shares surged more than 5 per cent and the Dow Jones Industrial Average rose more than 500 points after news of the US decision to delay imposing tariffs on lap
Stock numbers for Apple seen on a monitor at the New York Stock Exchange yesterday. Apple shares surged more than 5 per cent and the Dow Jones Industrial Average rose more than 500 points after news of the US decision to delay imposing tariffs on laptops, cellphones and some other Chinese products.PHOTO: AGENCE FRANCE-PRESSE

But it is moving forward with 10% tax for most goods as planned

WASHINGTON • The US has delayed imposing a 10 per cent import tariff on laptops, cellphones, video game consoles and some other products made in China that had been scheduled to start next month, in an abrupt pull-back from a hardline stance on Chinese trade.

The US Trade Representative's (USTR) Office action yesterday was published just minutes after China's Ministry of Commerce said Vice-Premier Liu He held a phone conversation with US trade officials.

The United States is delaying the imposition of new 10 per cent tariffs on Chinese electronics until Dec 15.

The decision came less than two weeks after US President Donald Trump said on Aug 1 that he would impose a 10 per cent tariff on US$300 billion (S$415 billion) worth of Chinese goods, blaming China for not following through on promises to buy more American agricultural products.

However, the administration is still moving forward with 10 per cent tariffs on much of the US$300 billion list first disclosed in May, publishing a 122-page list of products that will face tariffs beginning on Sept 1, including live animals, dairy products, contact lenses, motorcycle engines, lithium ion batteries and various types of steel.

Since Mr Trump's Aug 1 tweets threatening the new tariffs, the US benchmark S&P stock index has dropped more than 4 per cent.

Yesterday, technology investors welcomed news of the delay, pushing an index of chip stocks up 2.8 per cent, while shares of Apple surged more than 5 per cent and the Dow Jones Industrial Average rose more than 500 points.

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

In a sign that the administration may be expecting something in return, Mr Trump tweeted yesterday: "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 for which tariffs will be delayed until Dec 15 include computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing, the USTR Office 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.

The announcement comes amid growing concerns about a global 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.

Mr Trump had 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's Office will publish additional details and lists of the specific product types impacted by the announcement.

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

China's Commerce Ministry said in a statement yesterday that the Chinese side lodged solemn representation on additional tariffs on Chinese goods scheduled to start next month, as senior Chinese and US trade officials spoke by telephone.

The Chinese statement made no mention of the planned tariff delay.

Mr Liu spoke to US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnu-chin yesterday.

"Both sides agree to talk again on the phone within two weeks," said the statement.

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

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.

 
A version of this article appeared in the print edition of The Straits Times on August 14, 2019, with the headline 'US delays Sept tariffs for some Chinese products'. Print Edition | Subscribe