China's currency soared Tuesday following the announcement that the 10% tariff that was supposed to hit $300 billion worth of Chinese goods on Sept 1. will be delayed or suspended indefinitely for some products.
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“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,” the U.S. Trade Representative said in a press release.
“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.”
The news sent the offshore Chinese yuan to better than seven per dollar for the first time in a week before paring its gains. The currency was trading near 7.10 per dollar ahead of the announcement and on Aug. 6 touched a more than one decade low of 7.14 per dollar amid accusations China was manipulating its currency to gain an edge in trade.
Earlier this month, Beijing, for the first time since 2008, let the yuan slide below seven per dollar. A weaker yuan makes Chinese goods cheaper for overseas buyers, helping China deal with the fallout from the trade war.
The weakening of the yuan led the Trump administration to label China a “currency manipulator,” sparking concerns the trade war between the world’s two largest economies could morph into a currency war.