WASHINGTON (NEXSTAR) — President Trump says he’ll hold off on additional tariffs on Chinese imports because he fears Christmas shopping would be impacted, as economists were predicting higher prices for toys, electronics, and clothing.
The stock market rallied on the news, as investors who feared major retaliation from China got their own Christmas present.
Some economists say Trump may have run up against the limits of his ability to strongarm China over trade. Foreign trade expert Bill Reinsch says the president got the message.
“I’m doing this for Christmas season just in case some of the tariffs would have an impact on U.S. customers,” he said.
On Tuesday, the president told reporters that potential tariffs will be delayed until December to keep consumer prices down.
Democratic Congresswoman Cheri Bustos of Illinois said in a statement that it’s clear the tariffs haven’t hurt China.
“American farmers and consumers are paying the real price for this trade war,” she said.
Sen. Sherrod Brown, D-Ohio provided this statement Tuesday:
“Tariffs are a temporary trade tool, not a long term strategy. I’ve called on President Trump to use tariffs as a part of a broader trade policy that encourages investment in American workers and brings jobs back from overseas. Instead, the President has levied threats against our allies and put in place a tax bill that encourages companies to ship jobs overseas and gives them a 50 percent off coupon to do so.
“The bottom line is Sen. Brown wants to see a long term trade policy from this President – not this haphazard policy that seems to change day to day,” the statement continued.
Rep. Cynthia Axne, D-Iowa, released this statement:
“For months, I have been calling on the Administration to consider the cost of the tariffs on families in Iowa and across the country. While I’m relieved the Administration is delaying some of these tariffs because they recognize Americans are the ones paying for them, many tariffs will still start on September 1st. The Treasury Department still needs to research the full cost of the trade war to American families, who will now pay an extra $1000 per year for everyday items like gloves and scarves.”
Meanwhile, the United States and China continue to negotiate.
“We had a very good talk yesterday with China. Very, very productive call,” Trump said.
His decision to walk back tariffs comes after economists say China fired its own warning shot by letting the value of its currency drop. That also sent U.S. stock prices tumbling.
Reinsch says China’s actions show it’s not backing down.
“We’re in a situation where we’re demanding things the Chinese are not going to give us,” he said.
The president says he wants China to agree to a better deal for U.S. farmers and to stop stealing U.S. companies’ intellectual property.
Formal trade talks with China will resume in September.