Trump delays some tariffs on Chinese goods
Business pressure helps push back threat to Dec. 15
The announcement Tuesday from the Office of the U.S. Trade Representative was greeted with relief on Wall Street and by retailers who have grown fearful that the new tariffs would wreck holiday sales.
The administration says it still plans to proceed with 10% tariffs on about $300 billion in Chinese imports — extending its import taxes to just about everything China ships to the United States in a dispute over Beijing’s strong-arm trade policies.
But under pressure from retailers and other businesses, President Donald Trump’s trade office said it would delay until Dec. 15 the tariffs on nearly 60% of the imports that had been set to absorb the new taxes starting Sept. 1.
Among the products that will benefit from the 3
The administration is also removing other items from the tariff list entirely, based on what it called “health, safety, national security and other factors.”
Separately, China’s Ministry of Commerce reported that top Chinese negotiators had spoken by phone with their U.S. counterparts, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and planned to talk again in two weeks.
The news sent the Dow Jones Industrial Average soaring before it settled up 373 points Tuesday. Shares of Apple, Mattel and shoe brand Steve Madden, which stand to benefit from the delayed tariffs, led the rally.
Trump, speaking to reporters in New Jersey, confirmed that he had decided to delay the tariffs, which could force retailers to raise prices, to avoid the economic pain that could result during the holiday period.
“We’re doing (it) just for Christmas season, just in case some of the tariffs could have an impact,” Trump said.
Trump has repeatedly argued that his tariffs are hurting China, not American consumers. But by delaying higher tariffs on consumer goods, Trump is tacitly acknowledging that his import taxes stand to squeeze American households too.
Tariffs are taxes paid by U.S. importers, not by China, and are often passed along to U.S. businesses and consumers through higher prices.
Jay Foreman, CEO of the toy company Basic Fun, said he’s pleased that the 10% tariffs have been delayed for products like his until December.
His company, based in Boca Raton, Florida, had already set prices for the holiday season and would have had to absorb the impact of the tariffs. Foreman said he is considering layoffs this fall to offset his higher costs and noted that despite Trump’s reprieve, tariffs remain a severe threat.
“We were relieved,” he said. “But does that stop the volatility and instability? No.”
Together, the news of negotiations and tariff delays provided at least a respite after weeks of heightened U.S.-China trade tensions. The relief might prove only temporary, though, if the tariffs eventually take full effect and Beijing retaliates against U.S. exports.
The Trump administration is fighting the Chinese regime over allegations that Beijing steals trade secrets, forces foreign companies to hand over technology and unfairly subsidizes its own firms.
Those tactics are part of Beijing’s drive to become a world leader in such advanced technologies as artificial intelligence and electric cars.
On Sunday, economists at Goldman Sachs downgraded their economic forecasts, citing the impending tariffs on consumer goods. And economists at Bank of America Merrill Lynch have raised their odds of a recession in the next year to roughly 33%, up from about 20%.
“We are worried,” Michelle Meyer, head of economics at Bank of America Merrill Lynch, wrote Friday. “We now have a number of early indicators starting to signal heightened risk of recession.”
Goldman said the tariffs on China have increased uncertainty for businesses, which will likely cause them to pull back on hiring and investing in new equipment or software. Trump’s tariffs on Chinese goods have also weighed down stock prices, which could depress spending by wealthier Americans, Goldman found.