Delayed Tariff Increase on Chinese Goods a Relief to Retailers
The United States is planning to delay additional tariffs on Chinese goods that were scheduled to begin on March 1, President Donald Trump announced on Sunday. In a series of posts on Twitter, Trump cited "substantial progress" in bilateral talks between the U.S. and China. As a result, the president said he would suspend the new levies that would have gone into effect as early as Friday, but didn't articulate a new deadline. Speaking at the White House hours after his tweets, Trump said there could be "very big news over the next week or two" if trade talks go well.
The National Retail Federation (NRF) and Retail Industry Leaders Association (RILA) both welcomed the news. “We welcome the progress made between the U.S. and China and commend the administration for its efforts to address unfair trading practices," said Matthew Shay, president and CEO of the NRF, in a statement. "The decision to avoid a tariff hike is a positive development, and we encourage the administration to build on this momentum and reach a resolution that will eliminate uncertainty for American businesses and consumers." Hun Quach, vice president of international trade for RILA, also released a statement, saying: “The President has made the right decision to delay the tariff increase on $200 billion worth of goods. We look forward to continuing our work with Congress and the Administration to quickly find a path forward that removes all tariffs on everyday consumer products."
Total Retail's Take: As we've covered before, the trade war with China has been cited as a primary cause of recent economic volatility, from the stock market dive last fall to fluctuations in oil prices — and retailers have been following it all very closely. For some background, in September 2018, the U.S. implemented tariffs on $200 billion worth of Chinese goods. These tariffs carried an initial rate of 10 percent, with a plan to increase them to 25 percent by Jan. 1, 2019, while adding $267 billion in additional goods to the list. In December, the U.S. and China agreed to a temporary truce, moving the Jan. 1 date to March 1, 2019, as the two sides work towards a larger trade deal. Now, retailers are waiting patiently to see what the new deal will be.