Tariff relief on tech goods drives rally in China, Hong Kong shares

China’s blue-chip CSI300 Index climbed 0.5%, while the Shanghai Composite Index gained 0.9% by the midday trading break, after losing 2.9% and 3.1% last week, respectively.

Hong Kong benchmark’s Hang Seng climbed 2.4% after an 8.5% loss last week. The Hang Seng Tech Index added 2.7%.

Trump’s administration granted exclusions from steep tariffs on smartphones, computers and other electronics imported largely from China, while indicating these goods will come under separate tariffs, along with semiconductors, that may be imposed within a month.

China’s Apple suppliers jumped on the temporary relief. The CSI Electronics Index jumped 0.9% by midday. Apple’s main assembly partner Foxconn Industrial Internet rallied 1.1%, and acoustic components manufacturer Goertek jumped 2.5%.

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Keeping a lid on gains, the CSI Semiconductor Index declined as much as 0.9% after Trump said that chips from China will face a national security probe over the next week. The news of the exemption “fuels expectation of potential improvement in trade relations, and even the prospect of trade negotiations,” said Li Shuding, an investor adviser of Galaxy Securities. He added that March loan data was better than expected, and “we expect intensive roll-out of policies” to support the economy.

Before Monday’s rebound, the CSI 300 Index and Hang Seng Index had lost 3.5% and 9.9%, respectively, since “Liberation Day” on April 2. Trump threatened to implement sweeping tariffs against trading partners with China being the major target, raising concerns about slowing global economic growth and disruptions to trade.

Goldman Sachs has revised its 12-month targets for MSCI China and the CSI300 Index, lowering them to 75 and 4,300, respectively, down from previous estimates of 81 and 4,500, respectively.

“U.S.-China trade tensions have soared to unprecedented levels, prompting concerns about global recession, and decoupling risks between the two largest economies globally in other strategic cohorts, notably capital markets, technology, and geopolitics,” China strategist Kinger Lau said in a note on Monday.

Elsewhere, China’s exports in March rose 12.4% from a year earlier, handily beating 4.4% growth expected in a Reuters poll of economists after factories rushed out shipments before the latest U.S. tariffs took effect.