Published: Tue, August 13, 2019
Finance | By Loren Pratt

Rand gains by more than 1% after U.S. delays some China tariffs

Rand gains by more than 1% after U.S. delays some China tariffs

The United States announced Tuesday that a 10% tariff set to be slapped on $300 billion of Chinese imports starting next month would be delayed until later this year for certain products, including "cell phones, laptop computers, video game consoles, certain toys, computer monitors and certain items of footwear and clothing".

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 USTR said in a statement.

Stocks surged Tuesday morning on news that the Trump administration would delay tariffs on some Chinese imports until December 15.

Economic experts have warned that Trump's trade war with China poses a major threat to USA markets and could risk a recession next year, not to mention the additional costs to US consumers.

"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".

The Dow gained more than 400 points, or 1.7%, rising to 26,339 at 10:40 a.m.

The administration is still moving forward with 10% tariffs on much of the $300 billion of imports first disclosed in May, publishing a 122-page list of products that will face tariffs beginning September 1, including smartwatches. Since the iPhone is designed in the USA but assembled in China, it is considered an import from that country and is subject to the tariffs. Popular products on the list include smart watches made by Apple and Fitbit, smart speakers from Amazon and Apple and Alphabet's Google and Bluetooth connected devices.

Financial markets have fully priced in a rate cut at the US central bank's September meeting following a recent escalation in the bruising trade war between the United States and China.

The delay could be calculated to avoid adding tariffs to popular consumer items during the busy back-to-school and holiday shopping seasons.

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