President Donald Trump on Tuesday may have indirectly confirmed his tariffs against China are raising consumer prices in the United States by postponing the latest tariff hike set for Sept. 1, “Just in case some of the tariffs would have an impact on U.S. customers.”
Trump’s latest move was made only a few hours after the United States Trade Representative (USTR) office announced it will delay until Dec. 15 some of the tariffs originally scheduled to kick-in on Sept. 1.
“We’re doing this for the Christmas season,” said Trump. “Just in case some of the tariffs would have an impact on U.S. customers.”
“So far they’ve had virtually none,” claimed Trump about the effects his previous tariff hikes have had on U.S. consumers.
“But 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.”
Consumer goods popular during the holidays as gifts benefited the most from the delay.
USTR said the delay affects electronics, including cellphones, laptops and video game console, some clothing products and shoes and “certain toys.” Other products on the list include footwear and apparel, food and kitchen items, numerous chemicals, fireworks, baby products and sports equipment.
Products in the categories exempt from the tariffs are critical to the U.S. consumer market, especially during the huge Christmas shopping season.
USTR said other products were being removed from the new China tariff list altogether on health and security concerns. It didn’t specify which items will be removed, however.
On Aug. 1, Trump announced 10% tariffs will be levied on Sept. 1 on the remaining $300 billion worth of Chinese imports not hit by new U.S. tariffs.
Some analysts, however, saw the delay as another Trump surrender to China. Trump’s latest unilateral giveaway to China without getting anything in return will confirm Beijing’s view that negotiations to end the trade war can be drawn-out until after the 2020 presidential election.
“It looks like he doesn’t want the price of iPhones going up into Christmas,” said Kyle Bass, hedge fund manager and Hayman Capital Management founder on CNBC’s “Squawk Alley.”
“The Chinese are going to read this as a key weakness.”
Bass also pointed out “it does look like President Trump has blinked.” Bass noted “every time it (Trump’s actions) makes the stock market go down a few hundred points” the president “backs away.”