The Trump administration’s decision this week to postpone import taxes on some goods shipped from China was a reprieve for companies caught in the middle of President Trump’s prolonged trade war with Beijing.
But businesses across a wide swath of sectors are still approaching the president’s latest move with trepidation, as he has followed the same playbook of starts and stops in threats of tariffs through the escalating dispute.
“We appreciate the administration hearing us about the damage retaliatory tariffs inflict and deciding to delay part of the list. But the uncertainty and volatility of policy based on tariffs is bad for American businesses and is bad for workers, families and the U.S. economy,” said Gary Shapiro, president of the Consumer Technology Association.
The “recent wild, tariff-induced swings in the stock market” are worrying to Americans planning for retirement, he said. Stocks climbed immediately after the announcement putting off the tariffs, but on Wednesday, the Dow Jones Industrial Average sank 800 points, more than 3%, in the worst day of losses this year. The Dow rebounded with a 300-point climb, but stocks overall ended lower for the week.
Trump announced at the beginning of the month 10% tariffs on $300 billion in goods shipped from China, a decision he said was spurred by Beijing’s failure to purchase large quantities of agricultural products from the U.S. and stop the sale of the addictive opiate fentanyl.
But with the move, the president reversed course from an earlier decision in late June to postpone the 10% duties after meeting with Chinese President Xi Jinping.
As businesses braced themselves for the forthcoming levies, set to take effect Sept. 1, the Office of the U.S. Trade Representative announced Tuesday that it would postpone some of the duties until mid-December and excluded other items altogether due to health, safety, and national security concerns.
The delay from the Trump administration came after hundreds of companies, large and small, lodged complaints with the U.S. trade representative over the impact the duties would have on their operations and warned that consumers would be forced to pay higher prices to cover the added cost of the levies.
Top administration officials conceded the delay of some of the tariffs was meant to shield consumers from economic pain during the busy holiday shopping season, as toys, electronics, and apparel are among the goods spared from the levies for now.
But other garments and consumer technology products are still set to be hit with the 10% tariffs come Sept. 1.
Trump’s duties have already taken a toll on some companies such as Macy’s, which tried to raise the prices of luggage, housewares, and some furniture items after Trump placed tariffs on $250 billion in products imported from China, the world’s second-largest economy.
Jeff Gennette, CEO of the Cincinnati-based retailer, told investors Wednesday that Macy’s “learned from that experience that the customer had very little appetite for those cost increases.”
Trade groups whose industries will take a hit from the tariffs said they are pleased with the respite from the Trump administration, but warned the continued uncertainty inflicts pain on Americans despite the president’s insistence that China is paying the cost of the duties.
“Uncertainty for U.S. businesses continue, and tariffs taking effect Sept. 1 will result in higher costs for American families and slow the U.S. economy,” said David French, senior vice president for government relations for the National Retail Federation.
Matt Priest, head of the Footwear Distributors and Retailers of America, said the Trump administration’s move to delay the 10% levies is “an acknowledgment that tariffs are indeed paid by Americans.”
“It is no coincidence that the administration is allowing certain shoes to come in without raising taxes in hopes that prices do not rise at retail during the holidays,” he said, adding that the footwear industry already is subjected to high tariffs and any additional levies would lead to job losses and raise costs on consumers.
“While we are pleased with the decision to delay new tariffs on certain shoes, we are not satisfied,” Priest said.
Additional trade talks between Washington and Beijing are expected to resume in two weeks.
