What Trump giveth, Trump taketh away. And vice versa.
From CNBC: “Apple spikes after Trump administration delays China tariffs on electronics until December”
Shares of Apple spiked more than 5% Tuesday morning after the Trump administration said it will delay tariffs, initially set to go into effect on Sept. 1, until Dec. 15 for certain articles including electronics.
The United States Trade Representative said on Tuesday that “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.” It added that the remaining tariffs on “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,” will be delayed until Dec. 15.
My take: More to come, I’m sure.
Full text of the statement:
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.
File this under: Tim Cook is the “Street” smartest CEO in Silicon Valley. His relationship (whether fake or real) with President Trump has afforded and will continue to afford Apple with every possible advantage and privilege.
Alternatively, continue to follow the future governmental regulation coming for Google, Facebook and Amazon. Their CEOs apparently believe that thumbing their noses at the President of the United States is a wise business decision. It is not. .
This is wrong on so many levels. Trump’s Tweets are destruction of investor trust in the markets.
I mean, why announce tariffs you are going to rescind a week later? These are the actions of somebody having found a new toy and playing with it without regard to how that toy hurts people (but I’ll bet his friends are making big bank).
Whatever destruction is meted by the tariffs is short-term, but our future trade war victory over China will be far less fleeting. And our victory is assured. One cannot win a trade war when they’re already Killing us on trade. We hold the cards.
China is suffering badly and they can end their suffering any time that they choose or they can choose to implode economically. In either case, the greatest country in world history will continue to prosper.
We don’t need China, but they are finished without us.
The tariff threat worked very well against Mexico
@ Michael:
I’m not at all convinced that this trade war is going to redound greatly to the side of the USA during this administration. And I actually see this latest concession as a blink on our part. The bellicose approach just flat hasn’t worked with China, and indeed has proven counter-productive. The wiser heads have finally figured that out.
My guess is that this is a kind of hail-mary pass, in the hopes of salvaging some kind of agreement that will allow the Trump Administration to save face, and permit the Republicans to at least hold the Senate.
But I don’t think that takes into account the loose cannon that is Donald Trump. Now, maybe the cooler heads around him (of the few that remain) can convince him to sit out the rest of the game. But how likely is that? And there is not the slightest doubt in my mind that the Chinese are through dealing with this President, so unless he does sit it out, there will be no deal. IMHO.
What does this mean for Apple? Unfortunately, in the short run, we will probably see more crazy trading, in part because some players like that and will encourage it. In the long run, however, I agree with you, Michael, that there will be a resolution, although probably not with this administration. And when that finally happens, Apple and AAPL will make up for lost time with a vengeance.
All of the above is, of course, strictly my opinion.
@Joseph
Are you aware of the recent bank failures/bailouts in China? Baoshing Bank (May, 2019), Bank of Jinzhou (July, 2019) and Hengfeng Bank (August, 2019). There are rumors of many more coming. Prior to the trade war, China had gone 20 years WITHOUT a bank failure. Why are Chinese banks failing now? China is on the precipice of economic destruction.
They are significantly over leveraged. Kyle Bass has repeatedly noted that China recently received an over $400 billion loan from HSBC in order to prop up their failing currency. Why did the CEO of HSBC step down after only 18 months and after announcing record operating results?
China is a sinking ship. Time is in our side. Don’t forget that no deal with China is exactly what we currently have, so the failure to secure one, changes nothing.
The Fed didn’t lower rates to protect the American economy, the Fed lowered rates to attempt to keep the rest of the world from falling into recession.
You remember the film “Wayne’s World?”
Trump’s World is the sequel.
And no, I’m not laughing.
Anyone who didn’t see this coming isn’t paying attention. I trimmed today. If Apple goes higher from here I still have a seat on the Saturn 5 rocket 🙂
The United States is kicking the shit out of China in this so called trade war. It’s not even a war, really. China is on the verge of economic ruin and I’m certain they will see more banks collapse in the coming weeks, if they don’t start compromising. Conversely, The United States has seen no real downside. Farmers are a bit unhappy, but there are a few months before harvest season and prices are not much off the levels of the past years anyway. Meanwhile, we’re closer than ever to deals that will inhibit China from stealing $200 billion annually via IP theft and flooding our country with fentanyl. The deal struck on April 1st banning fentanyl will hopefully curb the tens of thousands of deaths we’ve seen from that deadly opioid.
@Dan,
You’re seeing the facts 100% accurately. China is in the process of getting Trumped. It’ll be increasingly harder to coverup the avalanche of bad economic news coming.
Even their media acolytes, globalist CEOs and NWO cheerleaders won’t be able to coverup the economic demise of China.
File this under: Socialism and Communism are anti-human and have never succeeded in world history.
Communism doesn’t exist anywhere in the world. What does exist are dictatorships led by psychopaths on the order of Hitler, Stalin, Mao, Idi Amin, Pol Pot, Somoza, Bautista, et al. Xi (and Putin) is just another iteration of a long list of power hungry psychopaths.
Does it bother you at all that your tax $ are paying the farmers to keep their barn doors open?
It infuriates me.
It’s a huge leap of faith that POTUS knows what he’s doing and that we end up in a better place than at the start of this trade war.
It bothers me none, if it helps offset our long-term enemy’s maneuvers. China made themselves known as our enemy when they stormed across the North Korean frontier and waged war against American troops.
Would you rather support our farmers or give money to illegal aliens for housing and food? I want to support all Americans before ANY foreigners.
Killing the farmers. I have a a couple great friends across the river that are bean farmers. Or were. Now they are just waiting on that mailbox money. I think they told me Trump is giving Mississippi county (actually in AR) a $130/acre. That does nothing to help the seed & fertilizer suppliers. Their crop duster pilots and mechanics. Equipment dealers. Transporters. Etc. It’s a whole economy being crushed that goes beyond just the land owners.
I am just waiting for the next Fed meeting where Trump won’t get his way causing him to change his mind on these tariffs. If not before.
Some great points, Turley. I hadn’t thought of some of those collateral damages.