Trump Delays Some Tariffs On China, Acknowledging Impact On Consumers

Topline: President Donald Trump walked back a plan Tuesday to implement a massive round of tariffs on several Chinese imports because doing so could have raised prices on holiday favorites such as phones, video game consoles and toys—the first acknowledgement from Trump that the U.S./China trade war may hurt American consumers.

  • Trump is delaying a 10% tariff on a portion of some $300 billion of Chinese imports, including cell phones, laptop computers, video game consoles, toys, computer monitors, and certain items of shoes and clothing, that was originally slated to take effect on Sept. 1.
  • Instead, the tariff won’t kick in until Dec. 15, which means those items—popular among holiday shoppers—won’t be more expensive during the holiday shopping season.
  • Shares from Best Buy, Macy’s and Apple jumped following the announcement.

News Peg: In an effort to strong-arm China into a trade deal, Trump has repeatedly said that China is paying for the tariffs, not U.S. customers and businesses. But in explaining his decision to delay this latest round of tariffs, which focuses more on consumer goods, Trump for the first time clearly stated that U.S. customers may feel the brunt of the tariffs. 

“What we’ve done is we’ve delayed it so they won’t be relevant in the Christmas shopping season,” Trump told reporters, according to the Washington Post. “Just in case they might have an impact on people.”

Brian Rose, senior Americas economist at UBS Global Wealth Management, said that while the announcement was only a delay, Trump’s acknowledgement might portend a greater reluctance to impose higher tariffs in the future.

Key Background: Trump has already placed a 25% tariff on a different set of Chinese imports, but has thus far avoided targeting consumer goods popular among the U.S. public. If prices on clothing, shoes and electronics increase in December, “people will definitely notice,” Rose said.

Big Picture: While some investors have been sounding the alarm about a recession if the trade war continues, Rose says that a 10% tariff will likely have a minimal impact on the economy in the short term, contributing to a .25% loss of GDP. If Trump increases those tariffs to 25%, the risk of a recession increases greatly, he says, and could result in a 1% reduction of GDP. 

Further Reading: The full list of goods with tariffs delayed until Dec. 15.

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I’m a San Francisco-based reporter covering breaking news at Forbes. Previously, I’ve reported for USA Today, Business Insider, The San Francisco Business Times and San

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