The Office of the Trade Representative has announced Tuesday he would remove certain goods from the tariff list based on health, safety, and national security reasons. These products would not face additional tariffs of 10%, and the other duties would be delayed until the end of the year.
Among the imported products that would be affected by the surprising decision are mobile phones, video game consoles, toys, clothing, footwear, and more. It would also apply to some popular Christmas-related products, including Christmas tree lights and ornaments.
Trade Representative Robert Lighthizer broke the news after a brief phone conversation with China’s Vice Prime Minister Liu He and the U.S. Treasury Secretary Steven Mnuchin. Lighthizer also confirmed they planned a follow-up phone call for the end of August.
The President also assumed in a tweet that China would very much like to make a trade deal. Furthermore, the President did not miss to complain that China had not proceeded with the purchase of the expected large quantities of U.S. agricultural products.
Earlier this month, Washington had announced that it would impose 10% tariffs on the remaining $300 billion worth of Chinese products that had so far were not affected by the imported duties. President Trump’s administration has already imposed tariffs on $250 billion worth of imports from China.
In response, China also had put retaliatory tariffs on $110 billion worth of U.S. goods. In addition to that, the Asian country also declined further purchases of U.S. agricultural products.
The news comes right after Goldman Sachs shared its concerns that the US-China trade war would lead to a global recession. According to many financial analysts, the tariff’s delay does not mean that the tensions between Beijing and Washington are over.
The credit rating agency Moody’s said in a statement that the current de-escalation of tensions could be temporary. Furthermore, it also warned that the relationship between the world’s two biggest economies remains complicated.
Tom Plumb, a chief investment officer of Plumb Funds, echoed his colleagues saying that thanks to the tariffs delay, the market would be able to get out of an oversold situation but it would bounce around for the rest of the year.
Despite the prognosis for temporary relief, the financial markets welcomed the news. The shares of leading tech firms went up immediately. Apple shares increased by 5%, and Best Buy jumped more than 8%.
What do you think? Is it a positive sign that the Trump administration decided to delay the tariffs, or is it just a temporary market relief?