Trump's China tariff delay: What it means for your wallet
The Trump administration announced it would delay implementing additional tariffs on a host of products from China for three months – which could spell good news for both U.S. retailers and consumers heading into a busy shopping season.
Before President Trump boarded Air Force One to visit a natural gas plant in Pennsylvania on Tuesday, he said the delay would help “a lot of different groups of people.”
“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which so far – they’ve had virtually none,” Trump told reporters. “They won’t be relevant to the Christmas shopping season.”
The increased tariffs, which were supposed to take effect on Sept. 1, are now put off until Dec. 15 for some items.
The U.S. Office of the Trade Representative detailed the products that would be affected by the delay, including cell phones, laptop computers, video game consoles, toys, computer monitors, kitchen items, sports equipment, footwear and clothing.
Scott Lincicome, an international trade attorney and adjunct scholar at the Cato Institute, noted there are a lot of “politically sensitive” items included in the list – which now are unlikely to be affected by tariffs during the holiday season.
“The timing, of course, is such that while the tariffs would go into effect on December 15, it’s almost certain that everything on the store shelves at that point will … have entered the U.S. before the 15th of December,” Lincicome told FOX Business. “Ninety-nine percent of the stuff that we last-minute shoppers might find on store shelves during the holiday season would have entered before the tariffs.”
Phil Schiller, Apple's senior vice president of worldwide marketing, speaks about the Apple iPhone XS at the Steve Jobs Theater during an event to announce new Apple products Wednesday, Sept. 12, 2018, in Cupertino, Calif. (AP Photo/Marcio Jose Sanch
Companies tend to respond to tariffs in one of two ways – either by eating the increased costs or passing them on to consumers. Had the tariffs gone into effect on these items as planned next month, it is possible retailers – and possibly consumers – would have felt the effects. Retailers with low margins, like those who make cheap clothes, are generally more affected by tariffs, Lincicome said.
While trade negotiators for the U.S. and China are expected to meet next month, Lincicome added that – based on the list – it would still seem the delay has more to do with U.S. consumers than bilateral negotiations.
Trump said on Tuesday that his administration had a very productive call with China this week.
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Items not included on the list released on Tuesday will be subject to higher duties at the outset of next month.