The S&P 500 roared back to life on Tuesday led by Apple, Inc. AAPL 4.23% after the U.S. Trade Representative released a long list of exemptions from the new 10% tariffs on an additional $300 billion in Chinese imports set to go into effect on Sept. 1. Tariffs on the exempted items do not go into effect until Dec. 15.
Exempted Items
The USTR said cell phones and other electronic devices, including laptops, video game consoles and computer monitors, are also exempt until December. Certain articles of clothing and most footwear is also clear for another four months. Tariffs will be delayed for certain chemicals, household glassware and silverware, microwaves, jewelry, and sporting equipment as well.
Apple wasn’t the only stock rallying on the tariff delay. Electronics retailer Best Buy Co Inc BBY 6.42% rallied 7.8% on the news. Urban Outfitters, Inc. URBN 4.54% gained 5.7%, while Steven Madden, Ltd. SHOO 3.42% climbed 5.9%.
Trump Misstep?
But while investors cheered the news, some of President Donald Trump’s critics said China appears to have gained the upper hand for the time being.
“Tell me why Xi should not continue to wait out The World’s Greatest Negotiator, who keeps ‘dealing’ with himself?” Kynikos Associates managing partner Jim Chanos said.
Trump said he delayed the tariffs on certain goods due to concerns about them impacting Christmas shopping season.
Market Reaction
Regardless of the reason for the tariff delays, the SPDR S&P 500 ETF Trust SPY 1.49% traded higher by 1.6% on Tuesday and the iShares FTSE/Xinhua China 25 Index FXI 1.54% gained 1.8%.
Tech stocks also got the biggest boost, with the VANECK VECTORS/SEMICONDUCTOR ETF SMH 2.91% trading higher by 2.9% and the Technology Select Sector SPDR Fund XLK 2.49% gaining 2.3%. On the commodities front, the United States Oil Fund LP USO 4.4% also jumped 4.8% Tuesday, while the SPDR Gold Trust GLD 0.61% fell 0.6%.
A full list of all the items subject to new 10% tariffs starting on Sept. 1 can be found at this link. A list of items that will be subject to the 10% tariffs starting on Dec. 15 can be found here.
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