As Recession Fears Grow, Trump Delays Tariffs On Some Chinese Goods

August 13, 2019 by Dan McCue
From left, China's President Xi Jinping and U.S. President Donald Trump shake hands on Nov. 9, 2017, during a meeting outside the Great Hall of the People in Beijing. (Artyom Ivanov/Tass/Abaca Press/TNS)

WASHINGTON — After days of growing indications the U.S. may lapse into a recession before the 2020 election, the Trump administration announced Tuesday that it is delaying some of the additional tariffs it planned to impose on Chinese goods on Sept. 1.

The announcement, which was made through the Office of the U.S. Trade Representative, said while some additional tariffs will be imposed on Chinese goods in just over two weeks, “certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent.”

“Further,” the agency said, “it was determined that the tariff should be delayed to December 15 for certain articles. 

“Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,” the trade representative said.

The agency said it will publish a Federal Register notice “as soon as possible” with additional details and lists of the tariff lines affected by Tuesday’s announcement.

The news was greeted with relief on Wall Street, which had been growing increasingly pessimistic in recent days.

Since Friday, economists at Bank of America, Goldman Sachs and Moody’s Analytics have all suggested the recession has become more likely between now and the 2020 elections, largely due to President Trump’s many trade disagreements.

On Tuesday morning, Mark Zandi, chief economist for Moody’s Analytics, told CNN, “I think if you look forward, the economy’s growth is going to be much slower. The trade war is doing a lot of economy damage — particularly in manufacturing.

“The manufacturing industries are now pretty close to recession, right on the precipice. And it goes right back to that trade war. So yeah, manufacturing has done pretty well up until now, but looking forward, the prospects aren’t nearly as good,” he said.

Zandi’s comments came just two days after Goldman Sachs announced the U.S.-China trade war is having a larger impact on growth than it originally estimated.

“We have increased our estimate of the growth impact of the trade war,” Goldman Sachs chief economist Jan Hatzius wrote in a note to clients Sunday. “The drivers of this modest change are that we now include an estimate of the sentiment and uncertainty effects and that financial markets have responded notably to recent trade news.”

Last week, economists at Bank of America said the chances of a recession occurring in the next 12 months has risen from 20 percent to 33 percent.

At the same time, they conceded “our model likely does not fully capture the threat of US-China trade tensions spiraling into a more severe trade war, which we view as the biggest downside risk for the U.S. economy.”

On Tuesday, as the president traveled to the Shell Pennsylvania Petrochemical Complex for an economic development announcement, he continued to insist that a U.S.-China trade deal could soon be in the offing.

“We had a very good talk yesterday with China — a very, very productive call,” he told reporters as he deplaned at Morristown Municipal Airport in New Jersey. “I think they want to do something.  I think they’d like to do something dramatic. I was not sure whether or not they wanted to wait until a Democrat has a chance to get in. Hopefully that’s not going to happen because the economy would go to hell in a handbasket very fast.”

At the same time, Trump acknowledged that he was delaying the tariffs so they would affect the always important and closely-watched Christmas shopping season.

“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which, so far, they’ve had virtually none,” Trump said. “The only impact has been that we’ve collected almost $60 billion from China — compliments of China.  But just in case they might have an impact on people, what we’ve done is we’ve delayed it so that they won’t be relevant for the Christmas shopping season.”

David French, senior vice president for government relations for the National Retail Federation, welcomed the apparent holiday reprieve.

“While we are still reviewing the details, we are pleased the administration is delaying some tariffs ahead of the holiday season and acknowledging the impact on American consumers,” French said. “Still, uncertainty for U.S. businesses continues, and tariffs taking effect September 1 will result in higher costs for American families and slow the U.S. economy. During this delay period, we urge the administration to develop 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.”

Economy

Thanksgiving Food Prices Sink as Americans Scale Down Their Feasts
Economy
Thanksgiving Food Prices Sink as Americans Scale Down Their Feasts

Turkey prices are sinking as the pandemic may keep some American families from hosting big groups this Thanksgiving. The price of ingredients in a traditional turkey dinner for 10 people is down to the lowest level in a decade, driven largely by grocers discounting the meal's centerpiece to... Read More

Wind Energy Labor Pact Viewed as Sign of What Biden Economy Will Look Like
Economy
Wind Energy Labor Pact Viewed as Sign of What Biden Economy Will Look Like
November 20, 2020
by Dan McCue

Ørsted, the Danish renewable energy group, and the North America's Building Trades Unions have entered into a pact to train an offshore wind construction workforce as the firm eyes construction of a series of wind farm projects up and down the East Coast. The deal comes... Read More

Airlines Say Thanksgiving Demand is Faltering as CDC Warns Americans Not to Travel
Travel
Airlines Say Thanksgiving Demand is Faltering as CDC Warns Americans Not to Travel

DALLAS — Three of the biggest U.S. airlines say demand is weakening for the usually busy Thanksgiving period as the CDC cautioned Americans against traveling for the holiday. United Airlines, Southwest Airlines and American Airlines said Thursday that they have seen an increase in cancellations and a decrease in new bookings as a surge in COVID-19 cases... Read More

FDA Allows 1st Rapid Virus Test That Gives Results at Home
Health
FDA Allows 1st Rapid Virus Test That Gives Results at Home

WASHINGTON (AP) — U.S. regulators on Tuesday allowed emergency use of the first rapid coronavirus test that can be performed entirely at home and delivers results in 30 minutes. The announcement by the Food and Drug Administration represents an important step in U.S. efforts to expand... Read More

Run-It-Hot Wins Argument Over How to Get Americans Back to Work
Employment
Run-It-Hot Wins Argument Over How to Get Americans Back to Work

Behind President-elect Joe Biden's plans to drive the U.S. back to full employment after the coronavirus slump lies a long-lost idea: The unemployed need jobs, not skills. That "run it hot" recipe for recovery is back in favor among policymakers — including, crucially, at the Federal Reserve. The argument is that... Read More

Biden Demands Trump and Congress Address Health and Economic Crises
Political News
Biden Demands Trump and Congress Address Health and Economic Crises

WASHINGTON — President-elect Joe Biden, faced with worsening economic and health crises, on Monday called for action from two political forces beyond his control: Congress, which is deadlocked over economic relief, and President Donald Trump, who refuses to concede the election and share information about the pandemic and national security.... Read More

News From The Well
scroll top