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.
Meanwhile, the United States and China continue to negotiate.
“We had a very good talk yesterday with China. Very, very productive call,” he said.
Trump’s 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.