Apple’s share price jumped as much as 5 per cent on Tuesday after the Trump administration’s surprise decision to delay tariffs on some Chinese products including laptops and mobile phones.
The Office of the US Trade Representative announced it would remove certain items from a list of products due to face additional tariffs from 1 September “based on health, safety, national security and other factors”.
Other items will be subject to the proposed 10 per cent tariffs as planned on 1 September.
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Wall Street reacted positively to the news with the Dow Jones and S&P 500 both rising around 1.5 per cent, led by technology stocks.
Markets had been reeling from an escalating trade war between the US and China which threatens already shaky global growth.
Morgan Stanley analysts forecast last week that the world economy could tip into recession if Mr Trump followed through on his threat to push tariffs on $300bn of Chinese imports from 10 per cent to 25 per cent.
On Sunday, Goldman Sachs issued its own warning that fears about rising trade tensions leading to recession are rising. The investment bank predicts the US and China will agree a trade deal before the 2020 presidential election.
The news that Mr Trump had relaxed his hardline stance came as some relief for investors. Apple and other US tech firms make their products in Chinese factories meaning they would have been subject to the additional tariffs.
Apple has warned the USTR that additional tariff costs would simply be passed on to consumers.
Mr Trump hinted that he expected something in return for his climbdown, tweeting: ““As usual, China said they were going to be buying “big” from our great American Farmers. So far they have not done what they said. Maybe this will be different!”
The USTR said it would publish additional details and lists of the items affected by its latest decision “as soon as possible”.