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Stocks rebound after U.S. agrees to delay tariffs on cellphones, laptops

13 August 2019

The Office of the U.S. Trade Representative said tariffs would also be delayed until December 15 on "computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing".

The office of the U.S. Trade Representative said Tuesday that while new tariffs are taking effect for some products on September 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".

USTR said in a statement it was going ahead with the tariffs next month, but would delay the start for cell phones, laptops, computer monitors, video game consoles and some toys, footwear and clothing.

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And Trump accused Beijing of continuing to renege on its commitment to buy United States agricultural goods. Beijing also halted United States agricultural purchases, inflaming a trade war that has roiled financial markets, disrupted supply chains and slowed global growth.

"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.

A 4.8% jump in Apple shares and a rise in chip stocks pushed the technology sector, traditionally among the most sensitive to trade issues, 2.33% higher.

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Karl Schamotta, market strategist at Cambridge Global Payments says the move is clearly designed "to alleviate pressure on American consumers as they head into a critical holiday-punctuated election season".

USTR is still moving forward with tariffs on September 1 on many products such as live animals, dairy products, skis, golf balls, contact lenses, motorcycle engines, lithium ion batteries, snowblowers and various types of steel. As a result, China is no longer the top trading partner of the US.

And it's removing other items from the list based "on health, safety, national security and other factors".

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"Although clearly taken with the aim of furthering political objectives, the decision to postpone additional tariffs on China will be encouraging news for global markets - but may be too little, too late". These products accounted for a combined $98 billion of Chinese imports in 2018, according to a Reuters analysis of US Census bureau data.

Stocks rebound after U.S. agrees to delay tariffs on cellphones, laptops