USA government delays tariffs on phones, laptops and video game consoles

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Earlier on Tuesday, China's chief trade negotiators, Vice Premier Liu He and Commerce Minister Zhong Shan, spoke to their USA counterparts, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

"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 U.S. Trade Representative said in a press release.

For imports that aren't being delayed or excluded, Chinese imports will see a tariff increase of 10% starting September 1. Those include cell phones, laptops, video game consoles, computer monitors, and some types of toys, shoes and clothing.

The two sides were due to hold another round of meetings in Washington in September, but the deterioration in relations in the past two weeks cast doubt on whether the talks would take place.

CNBC notes that delays have boosted tech stocks, with Apple shares trading almost 5% higher on the news and Best Buy also up by more than 8%. The Philadelphia chip index rose 3.16 per cent.

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However, some consumer electronics items spared from previous United States tariffs on Chinese goods, including smart watches, fitness trackers, smart speakers and Bluetooth headphones, were not given a reprieve.

USTR intends to conduct an exclusion process for products subject to the additional tariff.

The US and China are fighting over US allegations that Beijing steals trade secrets and forces foreign companies to hand over technology, as part of a drive to become a world leader in advanced technologies such as artificial intelligence and electric cars. It's expected that the increased tariffs will impact around $300 billion worth of imports from China.

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. Maybe this will be different!"

The Dow jumped 486 points, or 1.9%, to 26,392 in morning trade. The Nasdaq Composite was up 165.16 points, or 2.10 per cent, at 8,028.57.

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