U.S. delays tax on some China goods
Grace period granted for items like phones and toys until Dec. 15
The Trump administration will delay until mid-December the 10 per cent tariff on some Chinese products on many holiday-shopping lists.
By granting a grace period for everyday items like some phones and toys, the U.S. concession appears designed to avoid any disruption or additional price increases for consumers heading into the final four months of the year — from back-to-school purchases to Christmas shopping.
The announcement also came as the two sides spoke for the first time since the recent escalation in tensions.
Stocks surged on the news Tuesday. Apple spiked 4.7 per cent and Best Buy rose eight per cent on hopes the reprieve would boost electronics sales in the holiday season. Apparel retailers including Gap and L Brands rose, as did toymaker Hasbro and discount chain Dollar Tree.
The U.S. Trade Representative’s office said Tuesday that tariffs would be delayed until Dec. 15 for such items as cellphones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
“What this means is that retailers will be able to get their shipments in without the 10 per cent tariff, which is a sigh of relief,” said Poonam Goyal, a retail analyst at Bloomberg Intelligence.
With the Sept. 1 deadline, there wasn’t time for retailers to speed up ordering for the Christmas season because it often takes more than four weeks for inventory to come from China, Goyal said.
While some tariffs take effect on Sept. 1 as planned, “certain products are being removed from the tariff list based on health, safety, national security and other factors,” the USTR said.
About $250 billion of Chinese goods have already been hit by 25 per cent duties.
David French, a spokesperson for the National Retail Federation in Washington, said the organization was pleased by the delay on certain consumer goods but expressed caution.
“Continued uncertainty for U.S. businesses and consumers is a drag on the economy,” he said. “What we really need is an effective strategy to address China’s unfair trade practices by working with our allies instead of using unilateral tariffs that cost American jobs and hurt consumers.”
Chinese Vice Premier Liu He talked with USTR Robert Lighthizer and Treasury Secretary Steven Mnuchin by phone on Tuesday, according to a statement posted on the Ministry of Commerce website. Another conference call is planned again in two weeks.
The announcement came shortly after U.S. President Donald Trump insisted again that his levies were not causing higher prices for consumers and that China was bearing the cost of them. Economists and businesses have disputed that last point.