US to Delay China Tariffs on Some Products, Including Laptops, Cell Phones

By Reuters
August 13, 2019 Updated: August 13, 2019

WASHINGTON—The Trump administration on Aug. 13 delayed imposing a 10 percent import tariff on laptops, cell phones, video game consoles, and some other products made in China that had been scheduled to start next month, in an abrupt pullback from a hardline stance on Chinese trade.

The U.S. 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 U.S. trade officials.

The delay provides some relief to retailers. Although most retailers would have had their holiday merchandise in stores even before the earlier September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.

“We’re doing this for the Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” President Donald Trump told reporters as he prepared to depart from New Jersey for an event in Pittsburgh.

The decision came less than two weeks after Trump said on Aug. 1 he would impose a 10 percent tariff on $300 billion of Chinese goods, blaming China for not following through on promises to buy more U.S. agricultural products.

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

Since Trump’s Aug. 1 tweets threatening the new tariffs, the U.S. benchmark S&P stock index had fallen more than 4 percent.

On Aug. 13, technology investors welcomed news of the exemptions, pushing an index of chip stocks higher, while shares of Apple surged more than 4 percent and the Dow Jones Industrial Average rose almost 400 points.

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

In a sign that the administration may be expecting something in return, Trump tweeted on Aug. 13: “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 Dec. 15 include “computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,” the USTR said in a statement.

The U.S. Chamber of Commerce praised the tariff postponement and said it was “more important than ever that the two sides return to the negotiating table and recommit to achieving progress towards a comprehensive, enforceable agreement.”

The 21-page list of products that won’t get hit with tariffs until December includes baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, musical instruments, ketchup dispensers, baby diapers, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers, and food products.

USTR is still moving forward with tariffs on Sept. 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 Aug. 11 that fears of the U.S.-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 U.S. presidential election.

Cell phones, laptop and tablet computers, and toys and video game controllers were among the top four product categories in the proposed $300 billion list of products targeted by the latest 10 percent tariff. These products accounted for a combined $98 billion of Chinese imports in 2018, according to a Reuters analysis of U.S. Census Bureau data.

Trump had also personally criticized Chinese leader Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdose crisis in the United States.

The USTR office plans to conduct an exclusion process for products subject to the additional tariff.

By David Shepardson and Makini Brice.