WASHINGTON (AP) – The United States is delaying tariffs on Chinese-made cellphones, laptop computers and other items. Other Chinese imports have been removed from its target list altogether. The moves have triggered a rally on Wall Street.
The Office of the U.S. Trade Representative stated it’s still planning to go ahead with 10 percent tariffs on about $300 billion in Chinese imports, extending the import taxes on just about everything China ships to the United States. The tariffs are the result of a dispute concerning Beijing’s aggressive trade policies. Most of the levies are scheduled to kick in Sept. 1.
But the agency states it would delay the tariffs to Dec. 15 on some goods. And it’s removing other items from the list based “on health, safety, national security and other factors.” The news increased the Dow Jones Industrial Average by more than 460 points in midmorning trading Aug. 13.
China’s Ministry of Commerce reported that Chinese negotiators spoke by phone with their U.S. counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. They plan to talk again in two weeks.
Together the developments revived optimism that the world’s two biggest economies can make progress toward resolving a trade dispute. The trade war has rattled financial markets for more than a year and clouded prospects for the global economy.
The administration's delay came amid growing concern about economic fallout from the U.S.-China trade war. Economists at Goldman Sachs decreased Aug. 11 their economic forecasts, citing the impending tariffs on consumer goods. And economists at Bank of America Merrill Lynch increased odds of a recession in the next year to about 33 percent, an increase from about 20 percent.
"We are worried," said Michelle Meyer, head of economics at Bank of America Merrill Lynch. "We now have a number of early indicators starting to signal heightened risk of recession."
Goldman said the tariffs on China increased uncertainty for businesses, which would likely cause them to decrease hiring and investing in new equipment or software.