Christmas shoppers got a gift of sorts from the White House this week when the president pushed the tariff pause to August 1.
The shift should give retailers more time to stockpile most goods ahead of the holiday season, potentially pushing some tariff-related price increases to next year.
The tariff pause was set by the White House last spring — after Trump’s Liberation Day hikes were announced — and was supposed to be lifted Wednesday.
This week the White House extended the deadline, sending trading partners letters with an August 1 target.
After initially saying it wasn’t a hard deadline, Trump on Tuesday said he means it and there will be no extensions.
If higher rates do go into effect August 1, it’s likely that consumers won’t feel a difference until the new year, writes Paul Donovan, chief economist at UBS Wealth Management, in a note Monday.
Goods en route to the U.S. as late as August 1 should be exempt from additional tariffs, Donovan explains.
Since it can take as many as six weeks to move ships across the Pacific, that means some items could arrive as late as mid-September and still be tariffed at the lower rate.
At the same time, retailers pile stock ahead of the Christmas season — and have been bringing forward inventory to avoid higher tariffs.
The upshot is, most of the stuff on shelves for Christmas will have arrived before the new deadline.
