Several market-sensitive developments surfaced today regarding the lingering U.S./China trade war:
— U.S. Trade Representative delaying until Dec. 15 an additional 10% tariff on certain Chinese imports including “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing," the agency says in a statement. The USTR will publish on its website today additional details on products affected by the delay: statement. This comes “just in time for Christmas,” said one analyst.
The USTR statement:
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.
The USTR will publish on its website today, and in the Federal Register as soon as possible, additional details and lists of the tariff lines affected by this announcement.
— Reuters: Chinese Vice Premier Liu He conducted a phone call with U.S. trade officials, China's Ministry of Commerce said in a statement Tuesday. Liu spoke with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Tuesday evening, the statement said. China has lodged solemn representation on a U.S. proposal to raise tariffs on Chinese goods from September 1, the statement said. Officials from China and the United States agreed to talk again on the phone within two weeks, the statement said.
Perspective: Traders and farmers now know that the trade negotiating sands can flow through the hour glass. This however allows still more time for the two countries to seek an agreement that has been illusive. The Dow rallied nearly 500 points on the potential steps forward in the trade battle saga. This again shows that what looks like very negative news can turn around quickly with talks and delays in threatened tariffs.