By Damian Paletta and Heather Long

The Washington Post

WASHINGTON — The White House on Tuesday said it would delay imposing tariffs on Chinese imports of cellphones, laptop computers, video game consoles, and certain types of footwear and clothing until Dec. 15, significantly later than the Sept. 1 deadline President Donald Trump had repeatedly threatened.

The announcement, which came from the Office of the U.S. Trade Representative, ensures that Apple products and other major consumer goods would be shielded from the import tax until at least December, potentially keeping costs on these products down during the holiday shopping season.

It was the latest in a series of Trump’s unexpected announcements and reversals as the White House attempts to pressure China to change long-standing economic practices.

The confusion and uncertainty has weighed on the economy, leading companies to tighten up investment as they wait for a resolution.

White House officials have been split over how to proceed with China. Some, including Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow, have expressed optimism that a deal could be reached. But Trump and senior trade adviser Peter Navarro have defended the tough tactics, saying they are necessary to change China’s behavior.

Tuesday’s announcement reflected a more cautious approach, and it moved stocks sharply higher. The Dow Jones Industrial Average jumped after the news and finished the day 373 points, or more than 1.4%, higher.

The stock prices of Apple, Best Buy, Mattel and Macy’s were among those that rallied on the announcement.

The announcement effectively shields more than $100 billion in Chinese imports from tariffs until Dec. 15.

Shortly after the announcement, Trump told reporters that he delayed the tariffs “just in case” they would have a negative impact on U.S. shoppers this holiday season. This marked the most explicit admission he has made so far that the tariffs could have raised costs for American consumers and businesses and had a negative impact on the economy.

Trump has for weeks insisted that higher tariffs are somehow paid for by the Chinese government, even though tariffs are imposed as a form of customs duty that is paid for by U.S. importers.

“What we’ve done is we’ve delayed it so they won’t be relevant in the Christmas shopping season,” Trump said, “just in case they might have an impact on people.”

The economy has shown signs of slowing this year, and some business executives, lawmakers and White House officials had worried that the tariffs were damaging the economy even further. A number of businesses had cut back on investing, in part because they were unsure how Trump planned to proceed with the trade war. Democrats had begun attacking Trump for lacking a coherent plan in his approach to dealing with the Chinese, and the rapid reversals had caused dramatic swings in the stock market.

Sensing that Trump’s new defiance toward China could drive up costs, a number of companies petitioned the White House to exempt items they import from the new tariffs. They argued that these costs would be either passed along to the consumer or threaten the solvency of individual firms.

The U.S. Trade Representative said the 10% tariff would still go into effect in September on some items, including many food products, gloves, coats and suits. But it said tariffs on other items would be waived completely, “based on health, safety, national security and other factors.”

In a nod to pressure from religious groups and publishers, the White House completely exempted Bibles and certain other books from new tariffs.

Trump, in a Twitter post and comments to reporters, suggested that the announcement was meant as an overture to Chinese officials and an attempt to restart the stalled negotiations.

“I’m not sure if it was the tariffs or the call, but the call was very productive,” Trump said, referring to a conversation this week between top Chinese and U.S. negotiators.

But he added a warning on Twitter that China needs to buy more from the United States, “As usual, China said they were going to be buying ‘big’ from our great American Farmers. So far they have not done what they said. Maybe this will be different!”

The trade office provided a list of products that were exempted and would face the delayed tariff implementation date, which included highchairs, strollers, cellphones and many toys.

Many businesses had worried that higher tariffs on consumer goods for the Christmas shopping season could severely damage the economy at a time when some are warning that the risk of a recession next year has increased.

The tariff delay is likely to keep retail shopping strong this year, many economists say, but it does nothing to alleviate the confusion and uncertainty over what Trump will do next in the trade battle.

“Recession risks are elevated,” said Michelle Meyer, head of U.S. economics at Bank of America. “Uncertainty remains very high. Until there is a clear resolution, which we do not think will come before the end of next year, businesses will remain cautious in regards to investment.”

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