Markets React to US Tariff Delay on Consumer Goods from China

China Vice Premier Liu He spoke by phone with US Trade representative Lighthizer and after agreeing to talk again in two weeks the US announced that some consumer facing goods would be exempt until December 15.

The 10 percent increase still remains for articles published on the list on May 17, which will take effect on September 1.

Safe havens fell as soon as the news of the exemptions hit the wires. The JPY fell 1.25 percent and the CHF lost 0.41 percent. Gold traded 0.52 percent lower after the US announced that most of the consumer goods in the list would not be hit by the September 1 tariffs.

Equities surged with the news as the prolonged trade war has been the biggest negative factor hitting stocks. The consumer facing piece of the tariff exemptions boosted the tech sector, specially companies like Apple which rose 4.75 percent after the news

Oil also rebounded with WTI gaining 2.68 percent and Brent 2.8 percent as global growth concerns have eased as the two largest economies are back on the negotiating table.

West Texas Intermediate graph

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza