Trump Administration Delays Some China Tariffs

Aug 13, 2019
Originally published on August 13, 2019 5:40 pm

Updated at 4:10 p.m. ET

The Trump administration is postponing some of its new tariffs on Chinese imports — a significant retreat in the trade war that has rattled financial markets on both sides of the Pacific.

The Office of the U.S. Trade Representative announced on Tuesday that 10% tariffs on certain popular consumer items — including cellphones, laptop computers, video game consoles, computer monitors and some toys, shoes and clothing — will be postponed until Dec. 15.

"What we've done is we've delayed it, so they they won't be relevant to the Christmas shopping season," President Trump told reporters.

The delays affect about $160 billion worth of imports, according to calculations by the advocacy group Tariffs Hurt the Heartland. Tariffs on another $112 billion worth of Chinese imports are still set to take effect on Sept. 1 as scheduled.

The administration also announced that certain products — an estimated $2 billion worth — will be permanently removed from the tariff target list for reasons of health, safety and national security.

Bibles were dropped from the tariff list entirely, but American flags imported from China will face a 10% tariff next month. (The U.S. imported about $6 billion worth of American flags from China last year.)

Trump said the decision to delay some tariffs followed a telephone conversation with Chinese officials on Monday.

"We had a very good talk yesterday with China," Trump said. "Very, very productive call. I think they want to do something."

Frustrated with the slow pace of trade talks, Trump had ordered tariffs on an additional $300 billion worth of Chinese imports earlier this month. The move heightened trade tensions and triggered a sharp selloff on Wall Street.

Investors and retailers welcomed news of the tariff delay. The Dow Jones Industrial Average was up nearly 500 points in early trading.

"Clearly, the administration understands the importance of avoiding higher taxes on American families during the holiday season," said David French, senior vice president of the National Retail Federation. "Still, continued uncertainty for U.S. businesses and consumers is a drag on the economy. What we really need is an effective strategy to address China's unfair trade practices."

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MARY LOUISE KELLY, HOST:

The Trump administration is retreating a bit in its trade war with China. It is postponing tariffs on some popular Chinese-made items to avoid affecting the holiday shopping season. Now, this made retailers happy and investors happy. The Dow Jones Industrial Average jumped more than 370 points today. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: The administration's been preparing to impose 10% tariffs on hundreds of billions of dollars' worth of Chinese imports in less than three weeks. But this morning, the president's top trade official announced more than half those tariffs will be delayed until mid-December when store shelves will already be stocked for holiday sales. Economist Mary Lovely of Syracuse University says that means there will be no import tax this fall on popular consumer items, such as cellphones, laptop computers, video game consoles and certain toys and clothing.

MARY LOVELY: These are products that lots of people buy for Christmas presents and back to school. And so I think that that would have been quite unpopular.

HORSLEY: President Trump told reporters the tariffs were postponed after what he called a very productive phone call with Chinese officials. Trump also said he was acting to avoid any consumer fallout from the tariffs, a tacit admission that his import taxes are paid at least in part by Americans, something the president has long disputed. The stock market rallied on news of the tariff delay. The move was also welcomed by David French, senior vice president of the National Retail Federation.

DAVID FRENCH: It was an acknowledgement that we need to take a step back and slow the tariffs a little bit so that consumers don't feel the full brunt of it during the holiday season.

HORSLEY: Still, the delay is only a partial reprieve. While tariffs on an estimated $160 billion worth of goods are being delayed, tariffs on another $112 billion are still set to take effect September 1. French says it's all pretty confusing for retailers.

FRENCH: It's very difficult to operate a retail business when you don't know from month to month or week to week what the prices of your goods in the future will be.

HORSLEY: The administration's shifting trade policies are also a source of uncertainty for other countries. The president has now threatened and backtracked on tariffs on more than one occasion. As a result, Lovely says other countries may be more willing to wait Trump out or call his bluff.

LOVELY: Many people still support the president. They believe that this process will lead to a better outcome with China. Unfortunately, I think that that happy ending is looking more and more in doubt with each passing week.

HORSLEY: The administration did drop some items from the tariff target list altogether, including Bibles. It turns out China's a big supplier. American flags from China, however, are not getting a pass. Last year, the U.S. imported more than $6 billion worth of American flags from China. They'll face a 10% tariff starting next month.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.