The Trump administration will delay until mid-December the 10% tariff on some Chinese products on many holiday-shopping lists.
By granting a grace period for everyday items like phones and toys, the U.S. concession appears designed to avoid any disruption or price increases for American consumers heading into the final four months of the year -- from back-to-school purchases to Christmas shopping. Any goods imported for holiday sales would need to arrive several weeks before Dec. 15.
The announcement also came as the two sides spoke for the first time since the recent escalation in tensions.
Stocks surged on the news Tuesday. Apple Inc. spiked 4.7% and Best Buy Co. climbed 8% on optimism that the reprieve would boost electronics sales in the holiday season. Apparel retailers including Gap Inc. and L Brands Inc. rose, as did toy maker Hasbro Inc. and discount chain Dollar Tree Inc.
The U.S. Trade Representative’s office said in a statement Tuesday that tariffs would be delayed until Dec. 15 for items such as cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
While some tariffs will take effect on Sept. 1 as planned, “certain products are being removed from the tariff list based on health, safety, national security and other factors,” the USTR also said.
About $250 billion of Chinese goods have already been hit by 25% duties.
Chinese Vice Premier Liu He talked with USTR Robert Lighthizer and Treasury Secretary Steven Mnuchin by phone on Tuesday, according to a statement posted on the Ministry of Commerce website. Another conference call is planned again in two weeks.
The tariff announcement came shortly after Trump insisted again that his levies were not causing higher prices for American consumers and that China was bearing the cost of them. Economists and businesses have disputed that last point.
The International Monetary Fund last month cited trade tensions as one of the biggest risks to the global economy as it downgraded its 2019 growth forecast, while Goldman Sachs has said there’s growing concerns that the trade war will trigger a U.S. recession. A Bloomberg News August survey of economists gave a 35% probability of a recession in the next 12 months, up from 31% previously.
President Donald Trump’s announcement about the new duties ended a tentative trade truce that he forged with Chinese President Xi Jinping at the end of June in Japan, just as the two sides were resuming negotiations. In the past week tensions have escalated further as the U.S. Treasury Department formally labeled China a currency manipulator.
By Jenny Leonard and Shawn Donnan, with assistance from Olivia Rockeman.