Published: Wed, August 14, 2019
Global Media | By Garry Long

Australian Dollar Surges on Tariff Delay, US-China Trade Talks

Australian Dollar Surges on Tariff Delay, US-China Trade Talks

The US is delaying imposing tariffs on some imports from China until 15 December because of "health, safety, national security and other factors".

The administration is still moving forward with 10 per cent tariffs on much of the US$300 billion list first disclosed in May, publishing a 122-page list of products that will face tariffs beginning on Sept 1, including smartwatches, live animals, dairy products, skis, golf balls, contact lenses, motorcycle engines, lithium ion batteries, and various types of steel.

The cellphones, toys and other products subject to a delayed impact would still be tariffed starting December 15, the USTR said.

The products include mobile phones, laptops, video game consoles, some toys, computer monitors, and certain footwear and clothing.

USA stocks, which had been reeling in recent days from heightened trade tensions, immediately soared, with the Dow Jones industrial average surging more than 500 points before tailing off somewhat.

As was previously announced, on September 1, the United States will slap an additional 10% duty on nearly all jewelry produced by China. The move raised tariffs from 10% to 25% on a range of consumer products, including cell phones, computers and toys.

Because of the negative impact this would have on USA consumers, Sony, Nintendo, and Microsoft joined up to write a letter that opposed President Trump's tariff proposition.

Even so, many analysts doubt that the two sides are ready to make compromises that would lead to a comprehensive deal addressing American complaints about China's state-run economy, including the heavy government subsidization of companies and requirements that foreign firms hand over technologies in order to access China's large markets.

On Sunday, economists at Goldman Sachs downgraded their economic forecasts, citing the impending tariffs on consumer goods.

China trade deal in doubt, Trump says U.S. 'not ready'
The White House has reportedly been considering an extension of its ban on Huawei . Monday was the worst day of the year for the three stock benchmarks.

After the White House said tariffs on key Chinese imports should be delayed to Dec.15 for certain articles, President Trump commented on why they were postponed.

Crude oil prices gained traction in the last hour as the latest developments surrounding the US-China trade dispute eased concerns over a prolonged conflict and its potential negative impact on the energy demand outlook.

Trump has now partially reversed himself on the 10% tariff, without any corresponding concession from China.

"We had a very good talk yesterday with China", Trump said.

"As usual, China said they were going to be buying "big" from our great American Farmers".

Goldman said the tariffs on China have increased uncertainty for businesses, which will likely cause them to pull back on hiring and investing in new equipment or software.

Investors welcomed news of the tariff delay.

Despite the exchanges between the USA and Chinese negotiators, the prospects for negotiations remain dim.

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