Trump administration to delay 10% additional tariff against China

The Trump administration will delay the 10% additional tariff against China on cell phones, laptop computers, video game consoles, certain toys, and certain footwear and clothing products until December 15, in a move to placate the concerns expressed by major American import lobbies and manufacturers.

But the US will stick to its unilateral duty increase of 10% on the remaining Chinese products worth around $300 billion from 1 September, the office of the US Trade Representative announced on Tuesday.

The USTR announced it had published on 17 May “a list of products imported from China that would be potentially subject to an additional 10 percent tariff,” claiming that “this new tariff will go into effect on September 1 as announced by President Trump on August 1.”

Coming under intense pressure from the American business lobbies, especially the import and manufacturing lobbies, the USTR was compelled to remove “certain products” from the tariff list based on health, safety, national security and other factors.

It maintained that “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,” suggesting that tariffs on these products will be delayed until 15 December. Just cellphones and laptops represent about $80 billion of trade, more than a quarter of the tariffs that were posed to take effect, with a 10% levy, in just a few weeks.

While the latest move of the Trump administration to push certain products to December 15, negotiations between the US and Chinese teams are expected to commence in September amid growing divergences on a varies of issues.

Last month, the talks between the two sides produced modest results as several sensitive issues, including the quantum of purchases of farm products by China from the American producers and removal of American restrictions on sale of hi-tech products to China, could not be resolved.

China has claimed that it struck to its bargain of the understanding reached between President Trump and Chinese president Xi Jinping in Osaka on the margins of the G20 leaders meeting. But President Trump accused the Chinese for not living up to their promises.

Chances of striking a credible deal next month still hang in balance but the stock market soared on the news of yet another potential thaw in the tensions between the world’s two largest economies. The Dow Jones Industrial Average was up more than 400 points, or nearly 1.7%, in morning trade Tuesday.

According to the Wall Street Journal of 13 August, “Apple Inc. surged more than 4.5% on news that smartphones, including its iPhone would be spared until at least December from the proposed tariffs.”