No sooner had Donald Trump tweeted in defense of the ongoing trade war with Beijing, than a veritable deluge of market-friendly headlines crossed, sending stocks sharply higher in morning trading on Wall Street.
Apparently concerned about the prospect of rising consumer prices in the next round of tariffs, the USTR announced on Tuesday that the Trump administration will delay until December 15 an additional 10% levy on select Chinese goods. Those goods are:
- Cell phones
- Laptop computers
- Video game consoles
- Certain toys
- Computer monitors, and
- Certain items of footwear and clothing
The USTR subsequently published the full lists for each effective date. You can scroll through them below. Stocks exploded higher on the news, erasing Monday’s steep losses – for now anyway.
The USTR’s announcement came just minutes after Chinese Vice Premier Liu He said he spoke with Bob Lighthizer and Steve Mnuchin on the phone today. Apparently, the three will chat again in two weeks.
That would appear to leave the door open for September principal-level negotiations to move forward, despite Trump having cast considerable doubt on the scheduled talks late last week, telling reporters he was indifferent to the situation.
The offshore yuan surged the most this year on the news.
For his part, Trump continued to sound skeptical. “As usual, China said they were going to be buying ‘big’ from our great American Farmers [but] so far they have not done what they said”, he tweeted, just as the market was digesting the headline deluge. “Maybe this will be different!”, he went on the exclaim.
In a statement, China’s Ministry of Commerce said Beijing had “strongly protested” the planned tariff escalation on September 1.
Tellingly, PBoC boss Yi Gang was on the call with Lighthizer and Mnuchin – as was Commerce Minister Zhong Shan and NDRC Vice Chairman Ning Jizhe.
Full press release from the USTR
Washington, DC – The United States Trade Representative (USTR) today announced the next steps in the process of imposing an additional tariff of 10 percent on approximately $300 billion of Chinese imports.
On May 17, 2019, USTR published a list of products imported from China that would be potentially subject to an additional 10 percent tariff. This new tariff will go into effect on September 1 as announced by President Trump on August 1.
Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent.
Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles. Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
USTR intends to conduct an exclusion process for products subject to the additional tariff.