Sun, 05 Jul 2020

The rand recouped earlier losses to strengthen to just over 1% against the dollar in late trade on Tuesday, after the Trump administration announced it would delay imposing a 10% tariff on some Chinese products.

Analysts had previously said that risk-off sentiment caused by the US/China trade war was negatively impacting the rand. Tuesday's tariff delay help the rand "make an aggressive move" from R15.39/$ to R15.16/$, said TreasuryONE in a snap note. It opened trade at R15.30 to the greenback.

The addition 10% tariff on some $300bn worth of Chinese imports was set to be implemented on September 1.

But in an statement the US Trade Representative's office said that "[...] 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%."

It added: "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."

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