Markets rally after United States delays tariffs on Chinese electronics and other imports

US delays tariffs on cellphones, laptops and toys from China

US delays tariffs on cellphones, laptops and toys from China

The U.S. Trade Representative said the new tariffs of 10%, due to kick in on September 1 would be delayed until mid-December on cell phones and other electronics products as well as some kinds of toys, shoes and clothing. The United States is delaying tariffs on Chinese-made cellphones, laptop computers and other items and removing other Chinese imports from its target list altogether in a move that triggered a rally on Wall Street.

On Tuesday, technology investors welcomed news of the exemptions, 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.

Since Trump's August 1 tweets threatening the new tariffs, the USA benchmark S&P stock index has dropped more than 4% percent.

The products include mobile phones, laptops, video game consoles, some toys, computer monitors, and certain footwear and clothing.

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Separately, China's Ministry of Commerce reported that top Chinese negotiators spoke by phone with their US counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and plan to talk again in two weeks.

In addition to the tariff delay on some items, the USTR says other products will be completely exempt "based on health, safety, national security and other factors". Since the iPhone is designed in the US but assembled in China, it is considered an import from that country and is subject to the tariffs.

According to lists published by the USTR, a broad category of items taken off a $200bn tariff list past year will be subject to the 10% tariff as of 1 September. That's largely because huge technology companies like Apple, Amazon, Microsoft and Google stand to benefit from not having tariffs on imported technology products. Since the latter is a tax that US companies pay, Apple could decide to eat the entire cost of the tax, pass it on to consumers in the form of higher prices, or pay some of the additional cost and have consumers pay the remainder.

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