Washington: US President Donald Trump backed down on his implementation of new tariffs set to begin next month on a batch of Chinese goods worth $300 billion.
The United States Trade Representative (USTR) office delayed tariffs on items on a list of Chinese goods to be hit with tariffs on Tuesday. The USTR said tariffs would be delayed until December.
The USTR said the change stems from “health and security factors.”
Analysts however believe US President Trump’s change in policy stems from the possible negative public reaction he may have faced if consumers found higher prices at retail stores during the holiday shopping season in December — the most important retail month of the year for US retailers.
On the new list of Chinese goods to be taxed products like Iphones, Addidas shoes, and Playstation video games would have been tagged with tariffs and retailers would’ve passed on the higher prices to consumers.
“It was determined that the tariff should be delayed to December 15 for certain articles,” stated the USTR in statement on Tuesday.
“Products in this group include, for example, cell phones, certain toys, computer monitors, and certain items of footwear and clothing,” added the USTR.
Trump is vulnerable and needs to appease the US public before the coming election set to begin next year. If consumers are unhappy and see their buying power reduced over the Christmas shopping holiday season they may show their dissatisfaction at the ballot box during the election.
US markets rejoiced at the news of the delay in tariffs, rallying hundreds of points. The Dow Jones Industrial Average increased by 372 points, the S&P 500 rose 1.5 percent and the Nasdaq increased by nearly two percent.
US President Trump also acknowledged that the decision to delay tariffs was to avoid hurting people during the holiday shopping season and that the tariff delays would “help a lot of people.”