Tariffs on imports from China have been cut from 145% to 30% for the next 90 days, which reduces a major headwind for importers.
Retailers also have some certainty, despite the likelihood prices are going up this year.
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The market was on fire early on Monday after President Donald Trump announced the reduction of tariffs on Chinese imports from the self-imposed 145% to 30%, for at least the next 90 days. This will allow for more negotiations, and although a deal is far from final, it looks like the tensions are coming down for now.
Some of the biggest moves came from companies in retail. Mattel (NASDAQ: MAT) was a big winner, rising 11.1% at its peak and holding a 10.2% gain at 3:45 p.m. ET after being in the president’s crosshairs. Deckers Outdoor (NYSE: DECK) jumped as much as 10.2% and Best Buy (NYSE: BBY) was up 11% but the two stocks fell back to 3.1% and 6.1% gains on the day, respectively.
Image source: Getty Images.
Mattel has specifically been on Trump’s mind because its CEO said tariffs will be an added cost to consumers and won’t result in U.S. manufacturing. The company may be able to diversify supply outside of China, but with little scale in the U.S., it’s unlikely the company would move production to its home country.
That released the ire of Trump, who has threatened Mattel-specific tariffs. But that’s unlikely, and Mattel will now benefit from the lower tariffs announced today.
Mattel and Deckers Outdoor fall into similar buckets as companies that produce products in China and other Asian countries hit by tariffs. Higher costs could have a direct impact on their bottom lines, but the other factor to add in is the squeeze tariffs could put on demand for consumer goods.
If buyers are spending more money on each item it leaves less for more items, which may mean a few fewer Barbies or Hoka shoes sold this holiday season.
In that respect, tariffs could have been a double-whammy this year.
The same can be said for Best Buy, which was facing higher costs for nearly all of its…
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