Trump delays tariffs on Chinese-made laptops, cell phones, toys and video games

The Trump administration said it will delay U.S. tariffs on popular electronic goods such as iPhones, Xboxes and laptops that are made in China on the same day the government reported the biggest increase ever in the price of computers.

A 10% tariff was set to take effect on September on an additional $300 billion in Chinese imports that included many consumer products omitted from earlier round of U.S. duties. For the first time cell phones, computers, video-game consoles and smart-home devices such as the Amazon AMZN, +2.01% Echo would have been subject to the tariffs.

Now those tariffs will be put off until Dec. 15, the Office of the U.S. Trade Representative said Tuesday. The U.S. is also exempting certain toys, clothing and footwear until shortly before Christmas.

The White House had been under pressure from Silicon Valley to delay or rescind the tariffs, with companies saying they would have to raise prices before the holiday shopping season.

After a series of steep losses, the U.S. stock market surged in Tuesday trades. The Dow Jones Industrial AverageDJIA, +1.59% jumped 500 points and the S&P 500 index SPX, +1.54% also soared.

Earlier Tuesday, the government said the price of computers surged 2.8% in July, the single biggest monthly increase since the Bureau of Labor Statistics began keeping track in 2005.

Higher prices of popular consumer staples could have become a political lightning rod for President Trump as he gears up for reelection.

Until very recently, U.S. tariffs on Chinese goods fell most heavily on industrial products out of the public eye. The new duties announced by the President on Aug. 1 would have covered virtually every product coming from China.

Many consumer goods found in Best Buy BBY, +8.18% or on Amazon are made in China: Cell phones, computers, video games, smart-home devices, televisions, stereos, speakers. China also manufacturers a lot of the toys and clothing sold in the United States.

It not entirely clear why the price of computers soared in July. Trump had threatened in June to apply tariffs to all imports from China, but he struck a deal with Chinese President Xi Jinping at the end of that month to allow more time for the two countries to negotiate a trade deal.

Angered at the lack of progress, Trump announced on Aug. 1 that the U.S. would broaden its tariffs to cover virtually all Chinese goods starting in September. Companies may have raised prices given their uncertainty over the White House strategy.

Even with the increase in prices in July, the cost of computers and related “information technology” products are still lower now than they were one year ago. The cost of these goods have declined 1.2% in the past year.

The cost of consumer electronics have fallen every year since the government began keeping track in the early 2000s.

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