The US is to delay imposing 10% tariffs on a number of Chinese products including laptops and phones until December – helping Wall Street shares bounce back after a big sell-off.
Extra duties were set to have been imposed on a $300bn list of products from next month but this has been pushed back to 15 December for “certain articles” including laptops and mobile phones.
Tariff hikes on games consoles, certain toys, computer monitors and some items of footwear and clothing have also been delayed, the Office of the US Trade Representative (USTR) said.
The delay is likely to provide some relief for US retailers stocking up on Chinese-made goods ahead of the festive season.
Speaking to reporters in New Jersey, Donald Trump said: “We’re doing this for the Christmas season, just in case some of the tariffs would have an impact on US customers.”
The abrupt pull-back from Washington’s hardline stance came after a call between Chinese and US officials.
It helped New York’s Dow Jones Industrial Average surge by as much as 500 points, or around 2%, recovering from major losses it suffered the day before.
Shares in tech stocks were big gainers, with iPhone maker Apple up 5%.
In London, multinational mining companies such as Anglo American and Antofagasta made gains, helping lift the wider FTSE 100 by 0.3%.
US traders have endured a volatile period over the last week as anxiety over Washington’s trade war with Beijing ramps up amid speculation the two countries may not reach a deal until next year’s presidential election.
Events elsewhere, such as major protests in Hong Kong and market turmoil after primary elections in Argentina, have added to the combustible mix of world events troubling investors.
With signs that global economic growth already slowing, traders worry about a sustained trade war on China dragging the outlook down further – and are seizing on any signs of a thaw or hardening in the stand-off amid a quiet period for other economic or corporate news.
The latest decision came less than two weeks after Mr Trump said he would impose a 10% tariff on $300bn of Chinese goods, blaming China for not following through on promises to buy more American agricultural products.
A tweet from the president seemed to suggest he may be expecting something from Beijing in return for the latest action.
“As usual, China said they were going to be buying ‘big’ from our great American Farmers,” Mr Trump wrote.
“So far they have not done what they said. Maybe this will be different!”
The list of products that will not be hit by tariffs until December include baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, fireworks and nativity scenes.
USTR is still going ahead with tariffs on 1 September on products such as live animals, dairy products, golf balls and contact lenses.