In order to save the holiday season, Trump delayed the imposition of his recently-announced trade war escalation.

Trump changed his mind. So, what else is new?

The Wall Street Journal reports U.S. Retreats on Chinese Tariff Threats, Stocks Soar.

The Trump administration abruptly offered China—and U.S. consumers—a reprieve from sweeping tariffs that were poised to hit on Sept. 1, sending stocks sharply higher and raising hopes for reviving stalled-out talks on a trade deal.

The trade talks appeared in jeopardy after the Trump administration threatened Aug. 1 to extend tariffs of 10% to $300 billion in Chinese imports not currently taxed, including many consumer goods for the first time. They would come on top of 25% tariffs already imposed on $250 billion in imports from China.

The office of the U.S. Trade Representative said Tuesday that it will instead delay the new tariffs on many major categories of items, including smartphones, laptop computers, toys and some other items, until Dec. 15. The USTR said some products would be removed from the tariff lists entirely, based on health, safety, national security and other factors. The action came after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin participated in a call this morning with Chinese counterparts regarding the trade talks, according to a White House official.

The list of excluded items include some of the biggest ticket items facing tariffs. Cellphones and laptops alone represent about $80 billion of trade.

Big Win Coming

As usual, China said they were going to be buying “big” from our great American Farmers. So far they have not done what they said. Maybe this will be different!

— Donald J. Trump (@realDonaldTrump) August 13, 2019

A big win is always just around the corner.

Stock Market Reaction

The Dow is up 400 points (1.6%) with the S&P 500 up 50 points (1.8%) and Nasdaq up 47 points (2.2%).

Bond Market Reaction

The bond market reaction is interesting. The 5-year yield is up 7 basis points.

The 10-year yield is up 4 basis points and the 30-year-long bond is up a just 1 basis point, a mere 4 basis points from a new record low yield.

Trust the long bond.