US to delay some China tariffs until stores stock up for holiday shoppers
WASHINGTON — President Trump on Tuesday unexpectedly put off new tariffs on many Chinese goods, including cellphones, laptop computers, and toys, until after the start of the Christmas shopping season, acknowledging the effect that his protracted trade war with Beijing could have on Americans.
Trump pushed a 10 percent tariff on some imports to Dec. 15, and excluded others from it entirely, while facing mounting pressure from businesses and consumer groups over the harm they say the trade conflict is doing.
The stock market soared after the announcement, following weeks of volatility driven by fears that the standoff between the world’s two largest economies could hamper global economic growth.
The decision was the latest twist in a dispute during which China and the United States have alternately escalated tensions with tit-for-tat tariffs and softened their positions as they sought a deal.
Trump continued to insist on Tuesday that the trade war was hurting only China. But he also admitted that there was potential for the new tariffs to inflict economic pain closer to home.
“Just in case they might have an impact on people,” the president told reporters, “what we’ve done is we’ve delayed it so that they won’t be relevant for the Christmas shopping season.”
Trump, frustrated that negotiations had failed to yield an agreement, said on Aug. 1 that the United States would impose the 10 percent tariff on $300 billion worth of Chinese imports on Sept. 1. That would be in addition to a 25 percent tariff already imposed on $250 billion of Chinese goods.
But on Tuesday, the US Trade Representative’s Office said that while a substantial amount of Chinese imports would be subject to the Sept. 1 levy as planned, various consumer electronics, shoes, and other items would be spared until mid-December.
The office also said it was dropping 25 types of products from the tariff list altogether “based on health, safety, national security, and other factors.”
The items include car seats, shipping containers, cranes, certain fish, and Bibles and other religious literature, a spokesman said.
Stocks rallied immediately on the news, with the S&P 500 climbing nearly 2 percent in morning trading before ending the day up 1.5 percent. The benchmark index was lifted partly by shares in retailers and computer chip producers that have been especially sensitive to the trade tensions.
Best Buy, which gets many of the products it sells from China, was among the best-performing stocks in the S&P 500, rising more than 6.5 percent. Apple, whose iPhones and computers would have been subject to the tariffs, climbed more than 4 percent. The technology-heavy Nasdaq composite index ended the day up more than 2 percent.
The tariff announcement followed what Trump described as a “very productive” call involving Liu He, China’s vice premier and its lead trade negotiator; Robert Lighthizer, the US trade representative; and Steven Mnuchin, the Treasury secretary.
Trump has been pressing Beijing since last year for an agreement that would, among other things, strengthen protections for American intellectual property, open Chinese markets to American business, and result in China’s buying large quantities of American energy and agricultural goods.
But negotiators have made little progress since May. The stumbling blocks included whether the White House would roll back the tariffs already in place and whether Beijing would enshrine in law the changes it pledged to make.
As his reelection campaign gears up, Trump is increasingly focused on ending the conflict in order to maintain his support among farmers, who have lost some of their main export opportunities as China ordered state-owned companies to stop buying American soybeans. But he has also expressed an unwillingness to accept a deal with China that falls short of his goals.
The president has tried to persuade China to buy large amounts of American farm goods before an agreement is reached, but that hasn’t happened. He continued to berate China on Tuesday for not making such purchases and suggested that the tariffs might force it to do so.
“As usual, China said they were going to be buying ‘big’ from our great American Farmers,” he wrote on Twitter. “So far they have not done what they said. Maybe this will be different!”
Chinese officials and state media outlets have responded to Trump’s prodding by taking an increasingly strident tone and threatening to punish US firms.
Among corporate leaders, Tim Cook, Apple’s chief executive, has been particularly active in lobbying the president and Lighthizer against the tariffs. Apple, which builds most of its products in China, has been hit by the tariffs on some smaller products like the Mac Mini, computer parts, and cables. But the latest round of proposed levies significantly raised the stakes for the company.
So far, Apple has not raised prices because of the initial tariffs. And the company would probably try to absorb a 10 percent levy on iPhones at first, too, Daniel Ives, a technology analyst for Wedbush Securities, said in a research note Tuesday.
But if the tariffs continue into next year, he said, “Apple will have no choice but to pass this incremental $75 to $100 per smartphone to US consumers.
Trump’s tariffs have been front and center for corporate executives and investors since the trade war flared anew in May, and the topic had often been cited on earnings calls between company leaders and shareholders.
With the most onerous levies — those set for Sept. 1 — not yet in place, retail executives have mostly played down their effect on profits, at least publicly. The biggest retailers, including Best Buy, Macy’s, Target, and Walmart, are scheduled to report earnings for the most recent quarter starting this week.