The US economy is driven by the health of the US shopper and it has been that way for a number of years. This is the reason why data released by Washington on shopping is vital to see, are consumers bullish, neutral or bearish? President Trump loves tariffs and was going to impose another $300 billion on Chinese goods, until there was push back on the who was paying for the tariffs? In reality, the Chinese are not paying it is the American consumer and thus President Trump backed off on some of the items until after the holiday season. In an article by David Shepardson and David Lawder of Reuters, some of the items not having the tariffs are cellphones, laptops, and other consumer goods such as clothing and footwear. Think about the items people have under their Christmas tree. President Trump’s new deadline is December 15 for the last minute shoppers.
President Trump said, just in case the tariffs have an effect on US shoppers as if he did not know. Although most retailers have already purchased the goods for the critical holiday season, where many retailers make profits, the Retail Industry Leaders Association said the delay is welcome news as it will mitigate some pain for consumers through the holiday season.
While the Trump administration and China are still negotiating a trade agreement, Goldman Sachs no longer expects a trade deal before the 2020 US presidential election. For now, technology consumer stocks traded up on the announcement of the delay.
Linking to dividend paying stocks, everyone wants what is best for the country, however investors deal with reality not political announcements. In terms of tariffs, no tariffs is better for everyone, but President Trump wants tariffs even though remarkable few companies have moved their operations from China. If you shop at Wal-mart examine where the items come from and determine how successful the President is.
There are more questions than answers, till the next time – to raising questions.