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Donald Trump played Santa Claus on Tuesday, telling reporters he was delaying tariffs on Chinese imports to avoid any adverse impact on US shoppers before the festive season.
“We’re doing this for the Christmas season,” Trump told reporters as he left New Jersey for an event in Pittsburgh.
The move triggered a rally on Wall Street, sending the Dow Jones up 372 points, or 1.4%, by the close. Shares of Apple, Mattel and shoe brand Steve Madden shot up.
Asian stocks followed suit on Wednesday with the Shanghai Composite index rising 0.6%. Hong Kong’s Hang Seng, which has been hurt by disruptions from large anti-government protests, rose 0.5%. while the Kospi advanced 0.8% in Seoul and the Nikkei was up 0.6% in Tokyo.
Grateful shoppers, however, should not leave purchases of Chinese-made cellphones, laptops, video game consoles, some toys, computer monitors, shoes and clothing until the last minute.
The Office of the US Trade Representative (USTR) said it would delay tariffs on such goods until 15 December, 10 days before Christmas.
The USTR also said it was still planning 10% tariffs on about $300bn in Chinese imports, extending the import taxes on just about everything China ships to the US, as part of a dispute over Beijing’s aggressive trade policies. Most of the levies are scheduled to kick in on 1 September.
The USTR action was published minutes after China’s ministry of commerce said vice-premier Liu He conducted a call with US officials. It said talks with trade representative Robert Lighthizer and treasury secretary Steven Mnuchin would occur again in two weeks’ time.
Kenta Inoue, senior market economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo, pointed out that Trump’s tariff delay came just as US stocks were stalling.
“This appears to be a routine ploy by the US president, who applies trade pressure on China when stocks are doing well and opts for compromise when they are not,” Inoue said.
Although a 4.8% jump in Apple shares and a rise in chip stocks pushed the technology sector 2.33% higher, not all consumer electronics items were given a reprieve.
According to lists published by the USTR, a broad category of items taken off a $200bn tariff list last year will be subject to the 10% tariff as of 1 September. Popular products on the list include smart watches made by Apple and Fitbit, smart speakers from Amazon and Apple and Alphabet’s Google and Bluetooth connected devices.
The dispute between the world’s two biggest economies has rattled financial markets for more than a year and clouded the global economy.
The US and China are fighting over US allegations that Beijing steals trade secrets and forces foreign companies to hand over technology, as part of a drive to become a world leader in advanced technologies such as artificial intelligence and electric cars.
“Its unlikely that there’s going to be major deal but we might start to see some small concessions on both sides,” Tom Plumb, chief investment officer of Plumb Funds, told Reuters. “It’ll be good maybe for this week as we kind of get out of an oversold situation but the market is going to bounce around for the rest of the year.”
As news of the tariff delay broke, Trump used Twitter to complain that China had not followed through with expected large purchases of US agricultural products.
“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!” the president wrote.
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