After a positive start, Australian shares are treading water — despite US President Donald Trump backtracking from his plan to impose further tariffs on some Chinese goods from September 1.

Mr Trump's decision sent Wall Street and European markets sharply higher overnight as investors, retailers and technology companies breathed a cautious sigh of relief.

Instead, the additional levy on thousands of consumer products imported from China — including mobile phones, laptops, video game consoles, toys, and certain items of clothing and footwear — will now take effect from December 15.

"We're doing this for Christmas season, just in case some of the tariffs would have an impact on US customers," Mr Trump told reporters in New Jersey.

"Just in case they might have an impact on people, what we've done is we've delayed it so that they won't be relevant to the Christmas shopping season."

Market snapshot at 7:50am (AEST): ASX SPI futures +0.7pc at 6,540, ASX 200 (Tuesday's close) -0.3pc at 6,569

ASX SPI futures +0.7pc at 6,540, ASX 200 (Tuesday's close) -0.3pc at 6,569 AUD: 67.96 US cents, 56.35 British pence, 60.83 euro cents, 72.53 Japanese yen, $NZ1.05

AUD: 67.96 US cents, 56.35 British pence, 60.83 euro cents, 72.53 Japanese yen, $NZ1.05 US: Dow Jones +1.4pc at 26,280, S&P 500 +1.5pc at 2,926, Nasdaq +2pc at 8,016

US: Dow Jones +1.4pc at 26,280, S&P 500 +1.5pc at 2,926, Nasdaq +2pc at 8,016 Europe: FTSE 100 +0.3pc at 7,251, DAX +0.6pc at 11,750, CAC +1pc at 5,363, Euro Stoxx 50 +0.9pc at 3,357

Europe: FTSE 100 +0.3pc at 7,251, DAX +0.6pc at 11,750, CAC +1pc at 5,363, Euro Stoxx 50 +0.9pc at 3,357 Commodities: Brent crude +4.1pc at $US60.94/barrel, spot gold -0.7pc at $US1,501.14/ounce, iron ore -5.2pc at $US89.25/tonne

ASX boosted by easing trade tensions

Shortly after it opened, the ASX 200 lifted by as much as 31 points, but has since given up most of its gains.

By 2:30pm (AEST), Australia's benchmark index was flat at 6,570 — and briefly fell into negative territory in the early-afternoon.

The local market is underperforming compared to its Asia-Pacific peers. Japan's Nikkei and the Shanghai Composite have added more than 0.8 per cent each.

Most sectors were posting solid gains, led by health care (+4pc), materials (+1.1pc) and technology (+1pc).

Shares in CSL surged 6.3 per cent to $233.22 after the biotechnology company posted a record full-year profit.

Australia's fourth-largest listed company reported an 11 per cent jump in earnings to $US1.92 billion ($2.8b).

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CSL's result was driven by a 12 per cent rise in revenue for its vaccine unit, Seqirus, which accounts for about a fifth of overall sales.

The company will also pay shareholders an unfranked final dividend of $US1 per share ($1.47).

Meanwhile, shares in Aveo Group jumped 5.7 per cent, after the retirement village operator agreed to be taken over for $1.27 billion by Canadian asset management firm Brookfield.

Despite iron ore prices continuing to slump, Rio Tinto (+2.2pc) and Fortescue Metals (+2.4pc) posted strong gains.

Commonwealth Bank, however, was the biggest drag on the market.

CBA shares dropped 3.7 per cent as they are trading ex-dividend — which means new buyers of its shares will not receive the latest dividend.

Plastics packaging company Pact Group (-18.7pc) was the worst performer, after it posted a $290 million annual loss and scrapped its final dividend.

Many of the weakest stocks were gold miners, including St Barbara (-7.6pc) and Northern Star (7.3pc), after the precious metal's spot price dropped overnight.

The Australian dollar, meanwhile, has risen to 67.96 US cents.

Delayed tariffs ahead of Christmas

The US Trade Representative's Office (USTR) has released a 21-page list of products that will not be affected by tariffs until mid-December.

These include baby monitors and strollers, microwaves, instant print cameras, doorbells, high chairs, musical instruments, ketchup dispensers, baby diapers, fireworks, sleeping bags, nativity scenes, fishing reels, paint rollers and food products.

Furthermore, a separate group of products will be exempt from tariffs altogether, "based on health, safety, national security and other factors", the USTR said.

However, the Trump administration still plans to impose 10 per cent tariffs on Chinese food, clothing and other consumer electronics products from September 1.

This includes smartwatches from Apple and Fitbit, smart speakers from Amazon, Google and Apple, and Bluetooth headphones

Also remaining on the September tariffs list are live animals, dairy products, skis, golf balls, contact lenses, motorcycle engines, lithium ion batteries, snowblowers, various types of steel and some clothing items — including coats, men's suits and swimwear.

Overall, these exemptions, combined with renewed talks with China, suggest the US President may be willing to compromise.

Mr Trump's decision to blink first has also reignited investors' hopes of a US-China trade deal, and that a much-feared recession from a protracted trade war might be avoided.

His announcement comes amid growing concerns about a global economic slowdown.

Investment bank Goldman Sachs said on Sunday that fears of the US-China trade war leading to a recession were increasing and that it no longer expected a trade deal between the two countries before the 2020 US presidential election.

Apple leads relief rally

The Dow Jones index finished 373 points higher, up 1.4 per cent to 26,280.

The broader S&P 500 rose 1.5 per cent, and the tech-heavy Nasdaq jumped 2 per cent.

Wall Street received a major boost from Apple shares, which surged 4.2 per cent as its iPhone and MacBook sales would be spared from the new tariffs for the time being.

The delay in imposition of the tariffs provides some relief to retailers.

However, most stores would have stocked their holiday merchandise before the earlier September deadline, some might have faced the tariffs for fill-in orders late in the holiday shopping season.

Mr Trump announced the September 1 tariffs less than two weeks ago, blaming China for not following through on promises to buy more American agricultural products during talks in Shanghai at the end of July.

Since then, New York's benchmark S&P index has dropped more than 4 per cent.

ABC/Reuters