United States delaying new tariffs on Chinese electronics to Dec 15

Marco Green
August 13, 2019

Lighthizer's office in a recently published statement announced that additional tariffs on some Chinese imports, including cell phone and laptop computers, will be delayed until December 15.

The current administration already has imposed 25 percent tariffs on $250 billion worth of Chinese goods, which are paid for by the company that imports the goods, and expects to add an additional 10 percent tariff on $300 billion worth of Chinese goods in September.The U.S. Treasury reported at the end of June that the government has collected $63 billion from tariffs over the last 12 months.

However, the United States Trade Representative (USTR) said Tuesday that some electronic devices made in China are getting a delay and other items have been removed from the tariff lists altogether.

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

A 4.2% jump in shares of Apple, which makes iPhones and MacBooks in China, along with a rise in chip stocks pushed the technology sector 2.24% higher.

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. Maybe this will be different!"

"The overall China tariff/demand situation represents a $20-$25 overhang on Apple shares and will remain a lingering cloud over the story in the near-term", Ives wrote in a note published August 13, prior to the news about the tariff delay.

"The escalation of the U.S. China trade war has been an overhang. and the fact that we have got a bit of a reprieve on that is putting a bit of optimism into markets", said Art Hogan, chief market strategist at National Securities in NY. As a result, China is no longer the top trading partner of the US.

Investors took that as a sign of progress in trade negotiations, since a December implementation gives the two sides more than enough time to hammer out a wide-ranging trade deal to finally put their issues aside once and for all. These products accounted for a combined $98 billion of Chinese imports in 2018, according to a Reuters analysis of US Census bureau data.

"It intends to conduct an exclusion process for products subject to the additional tariff".

Other reports by Click Lancashire

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