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Holiday season dodges price hikes with Trump's latest tariff pause

Axios's profile
Original Story by Axios
July 8, 2025
Holiday season dodges price hikes with Trump's latest tariff pause

Context:

President Trump extended a pause on tariffs until August 1, effectively delaying potential price hikes for Christmas shoppers. This move allows retailers additional time to stockpile goods, likely postponing tariff-related price increases until after the holiday season. Chief economist Paul Donovan notes that goods arriving by August 1 will be exempt from new tariffs, potentially sparing consumers from immediate price impacts. However, some items that cannot be stockpiled might still see price increases. Despite the administration's stance that tariffs primarily affect foreign exporters, additional warehousing costs may lead to price hikes independently of tariffs.

Dive Deeper:

  • President Trump extended the tariff pause to August 1, providing retailers with more time to accumulate inventory ahead of the holiday season, thus delaying potential tariff-related price increases until the following year.

  • Chief economist Paul Donovan explains that goods arriving in the U.S. by August 1 will not be subject to additional tariffs, which should delay any immediate price impacts on consumers until after the holiday season.

  • While the tariff pause offers temporary relief, items that cannot be stockpiled may still experience price increases sooner, affecting consumer costs more immediately.

  • The administration maintains that tariffs are primarily a financial burden on foreign exporters who depend on access to the U.S. market, yet additional warehousing costs from stockpiling may independently drive up prices.

  • In August 2019, a similar tariff delay was implemented by Trump to prevent any adverse impact on U.S. consumers during the Christmas period, demonstrating a recurring strategy to protect holiday shopping.

  • Paul Donovan warns that any warehousing costs incurred from stockpiling goods will contribute to price increases, independent of the tariff situation, potentially affecting consumer prices in the long run.

  • Overall, while the tariff pause is a stopgap measure, the complex tariff situation remains unresolved, though holiday shopping may be temporarily shielded from immediate price hikes.

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