Financial markets around the world have rallied amid cooling tensions in the US-China trade war.
Washington announced on Tuesday that it would delay the introduction of 10% tariffs on a range of Chinese goods sold in the US, including technology products such as laptops, mobile phones and game consoles.
Marking a sudden ceasefire in the trade dispute between the world’s two biggest economies, the delay comes after Donald Trump threatened to slap 10% tariffs on $300bn (£248.7bn) of Chinese goods earlier this month.
The tariffs – border taxes paid by importers of Chinese goods to the US – had been due to come into force next month, in a significant escalation of the trade war. The Trump administration is still moving ahead with many of the tariffs, albeit excluding the key technology products for now.
The announcement came minutes after China’s ministry of commerce said that the vice-premier, Liu He, had held a phone call with US trade officials.
Stocks on Wall Street rallied sharply as news of the delay spread. The Dow Jones industrial average rose by more than 400 points to trade at about 26,324. Major US tech companies including Apple were among the biggest risers.
Assets considered to be safe haven investments during times of economic stress fell after the announcement. The price of gold – which had surged in recent weeks to the highest level in six years – fell by about 0.6% to about $1,500 an ounce.
European stock markets also closed the day higher. The FTSE 100 closed up 24 points at 7,250.
Full talks between Washington and Beijing are scheduled for September, raising hopes of further progress. Analysts said the tariff exemptions could indicate that Trump might be willing to compromise. Economic growth has faltered around the world, including in the US, against the backdrop of rising trade tensions.
Joshua Mahony, a senior market analyst at the financial trading firm IG, said: “For the most part, this is an exercise of kicking the can down the road, and from a market perspective that should be enough to put those US-China based fears on the backburner for the time being.”
