Global stocks surged Tuesday on news President Trump will wait until December to slap new tariffs on laptops, iPhones, toys, and some other imports from China (sorry Apple Watch and AirPods–wearables didn’t get a reprieve). Investors cheered the move as a sign trade negotiations between the United States and China, suspended since Aug. 1 when Trump vowed to impose tariffs on $300 billion in Chinese imports, are back on track. Tech sector stocks led the way, with Apple alone up 4% on the news. Qualcomm, Intel, and Nvidia were up 3% each.

It was a classic Trump maneuver: whacking China with a stick, then dangling a carrot to minimize market fallout. Trump stoked investor optimism yesterday by describing recent conversations between negotiators from the two nations as “productive.”

But as the The Donald giveth, he also taketh away. The new reprieve comes just as another—this one granting Chinese telecommunications giant Huawei Technologies a 90-day exemption from a national security ban—is set to expire.

The Huawei exemption was announced back in May, following a Commerce Department decision to add the Shenzhen-based giant and 68 other companies to a national security blacklist that effectively bars them from purchasing from U.S. suppliers. The edict dealt a potentially crippling blow to Huawei, which relies on Google’s Android operating system to power its smartphones and purchases more than $11 billion from American firms including Qualcomm, Intel, and Micron Technology.

The earlier exemption, too, helped contain market chaos. But it was billed as a fleeting stay of execution, not a permanent “get out of jail free” card. The grace period will expire on Monday, August 19.

Goldman Sachs, in a recent report, warns “retaliation by China appears possible should the August 19 deadline pass without another extension.” That could zap tech stocks yet again.

Huawei founder Ren Zhengfei boasts that his company has stockpiled enough components to minimize disruption to its supply chain. Earlier this week, at a developers’ conference in Dongguan, Richard Yu, CEO of Huawei’s consumer business, unveiled “HarmonyOS,” a new proprietary operating system for smartphones. But Huawei has offered few details about the system’s functionality and some analysts question whether it will appeal to consumers.

So what to expect next Monday? More drama, of course! As Trump himself loves to say: we’ll have to see what happens.

Clay Chandler

On Twitter: @ claychandler

Email: [email protected]



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