The United States Trade Representative office said Tuesday that new tariffs on certain consumer items would be delayed until Dec. 15, while other products were being removed from the new China tariff list altogether. It cited health and security factors.
The duties had been set to go into effect on Sept. 1, so the announcement eased concerns about the holiday shopping season.
The USTR said the delay affects electronics including cellphones, laptops and video game consoles and some clothing products and shoes and "certain toys."
Earlier this month, President Donald Trump announced a new round of 10% tariffs on $300 billion worth of Chinese imports that eluded duties.
Markets rallied on the news. The Dow Jones Industrial Average rose 372 points, while the S&P 500 jumped 1.48% and the Nasdaq rose 1.95%.
Delays on centerpiece technology products boosted tech stocks and distributors of technology items. Apple shares traded 4.2% higher on the news and Best Buy soared 6.5%. Chipstocks also moved out of correction territory with the Semiconductor ETF down 8% from its July high.
The delay in footwear and apparel tariffs lifted retailers, including Nike, Kohl's, and Nordstrom. The retail ETF the XRT rose 1.6%. Toy products being delayed caused Hasbro and Mattel to jump 2.75% and 4.6% respectively.
Other items on the list of delayed items include food and kitchen items, numerous chemicals, fireworks, baby products and sports equipment.
The USTR did not specify which items will be removed from the list but said it will conduct an "exclusion process for products subject to additional tariff."
Trump said Tuesday his decision to delay tariffs ahead of the Christmas season was to avoid an impact on holiday shopping. Additionally he said all of the delays "help a lot of people."
Separately, China's Commerce Ministry said Vice Premier Liu He had spoken by phone with U.S. Trade Representative Robert Lightizer and Treasury Secretary Steven Mnuchin and they agreed to talk again in two weeks.
The next round of trade talks had been expected to take place in September, after the tariffs went into place.
Uncertainty around the trade war has weighed on the markets. U.S. stocks had their worst day of the year on Aug. 5, when China let its currency weaken, crossing the 7 yuan-per-dollar threshold and said it would halt imports of agricultural goods from the U.S.
Here's the full statement from the USTR:
USTR Announces Next Steps on Proposed 10 Percent Tariff on Imports from China
Washington, DC - The United States Trade Representative (USTR) today announced the next steps in the process of imposing an additional tariff of 10 percent on approximately $300 billion of Chinese imports.
On May 17, 2019, USTR published a list of products imported from China that would be potentially subject to an additional 10 percent tariff. This new tariff will go into effect on September 1 as announced by President Trump on August 1.
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.
Further, as part of USTR's public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles. Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
USTR intends to conduct an exclusion process for products subject to the additional tariff.
The USTR will publish on its website today, and in the Federal Register as soon as possible, additional details and lists of the tariff lines affected by this announcement.
Correction: An earlier version misstated how cellphones would be affected by the USTR announcement. The office says tariffs on cellphones are being delayed.