The latest tariffs on American and Chinese goods aren’t as severe as expected, making stocks rise on Tuesday. Substantial profits in tech also propelled market gains.
The S&P 500 increased 0.5 percent to close at 2,904.31, headed by buyer discretionary spending and industrials. It is also less than half a percent from its record high.
The Nasdaq Composite improved 0.8 percent to 7,956.11 as Amazon, Apple, Alphabet, and Netflix closed higher.
China announced tariffs targeting over 5,000 American products. They will start on September 24. It will place a 10 percent tariff on certain goods it had earmarked for a 20 percent tax in the past.
The announcement comes after the Trump administration declared the United States will require 10 percent tariffs on $200 billion worth of imported Chinese goods, and those taxes will increase to 25 percent by the start of 2019.
Commerce Secretary Wilbur Ross said the increased tariffs are directed at changing China’s behavior and equalizing the playing field for American companies there. China is “Out of bullets” to counter, Ross said.
“At least for now, instead of getting us closer to the bargaining table with China, we’ve only pushed them further away as they are likely canceling their trip to the U.S.,” said the chief investment officer at Bleakley Advisory Group, Peter Boockvar.
The duties from both nations come after various news outlets reported American leaders were attempting to restart U.S.-China trade discussions.
“If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports,” President Trump said in a statement. “For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies.”
He added: “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices. Once again, I urge China’s leaders to take swift action to end their country’s unfair trade practices. Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection.”
More than 300 goods were made exempt from the tariffs, including Bluetooth devices, smart watches, bicycle helmets, safety equipment, and baby car seats.
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