A cellphone manufactured by ZTE, China's number-two smartphone maker, is seen in a store in Miami, Florida. Picture: JOE RAEDLE / GETTY IMAGES
A cellphone manufactured by ZTE, China's number-two smartphone maker, is seen in a store in Miami, Florida. Picture: JOE RAEDLE / GETTY IMAGES

Washington — The Trump administration on Tuesday delayed imposing a 10% import tariff on laptops, cellphones, video-game consoles and a wide range of other products made in China, in an abrupt pull-back from a hardline stance on Chinese trade.

The US trade representative’s office action was published just minutes after China’s ministry of commerce said vice-premier Liu He conducted a phone call with US trade officials.

The delay in the tariffs that had been scheduled to start in September provides some relief to retailers. Though most US stores would have stocked their holiday merchandise before the earlier September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.

The decision came less than two weeks after President Donald Trump said on August 1 he would impose a 10% tariff on $300bn of Chinese goods, blaming China for not following through on promises to buy more American agricultural products.

The administration is still moving forward with 10% tariffs on much of the $300bn list first disclosed in May, publishing a 122-page list of products that will face tariffs beginning September 1, including smartwatches.

Since Trump’s August 1 tweets threatening the new tariffs, the US benchmark S&P stock index has dropped more than 4%. On Tuesday, technology investors welcomed news of the exemptions, pushing an index of chip stocks up 3.1%, while shares of Apple surged more than 5% and the Dow Jones Industrial Average rose more than 500 points.

The exemptions, combined with renewed talks with China, suggest Trump may be willing to compromise.

In a sign the administration may be expecting something in return, Trump tweeted on Tuesday: “As usual, China said they were going to be buying ‘big’ from our great American Farmers.

“So far they have not done what they said. Maybe this will be different!” Trump tweeted.

Other products that will have tariffs delayed until December 15 include “computers, video-game consoles, certain toys, computer monitors, and certain items of footwear and clothing”, the US trade representative’s office said in a statement.

The Retail Industry Leaders Association said “removing some products from the list and delaying additional 10% tariffs on other products, such as toys, consumer electronics, apparel and footwear, until December 15 is welcomed news as it will mitigate some pain for consumers through the holiday season”.

The 21-page-list of products that will not be affected by the tariffs until December includes baby monitors and prams, microwaves, instant-print cameras, doorbells, high chairs, musical instruments, tomato-sauce dispensers, baby nappies, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers and food products.

The trade representative’s office 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.

A separate group of products will also be exempt altogether, “based on health, safety, national security and other factors”, it added.

The announcement comes amid growing concerns about a global slowdown. Goldman Sachs said on Sunday fears of the US-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 US presidential election.

Cellphones, laptop and tablet computers, toys and video-game controllers were among the top-four product categories in the proposed $300bn list of products targeted by the latest 10% tariff. These products accounted for a combined $98bn of Chinese imports in 2018, according to a Reuters analysis of US Census bureau data.

Trump has also personally criticised Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdosing crisis in the US.

Thetrade representative’s office plans to conduct an exclusion process for products subject to the additional tariff.

Reuters