President Donald Trump backed off implementing tariffs on a number of Chinese imports, leading some big voices on Wall Street — and from China — to claim he blinked first, and Beijing now holds the upper hand in the ongoing trade war.

“We also can see that imposing tariffs may harm the interests of the U.S., making it hard for Trump’s reelection.”

On Tuesday, United States Trade Representative (USTR) announced it is removing a number of items from the latest threat of 10% tariffs on about $300 billion worth of Chinese imports, including cell phones, laptops, video game consoles, certain toys, computer monitors and certain items of footwear and clothing.

“Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10%,” the USTR said in an announcement Tuesday morning. “Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles.”

The announcement sent the Dow soaring more than 450 points.

Of course, most investors and traders were thrilled to see the big move upward after a week of volatility.

The Dow closed up 382 points, or 1.5%, the S&P 500 closed up 43 points, or 1.5%, and the Nasdaq closed up 152 points, or 1.9%.

But some big names on Wall Street said that despite Trump and his administration’s claims that China is bearing the brunt of the tariffs, the trade war is indeed hurting U.S. consumers. And Tuesday’s announcement is proof because the products listed are crucial to the U.S. consumer market — particularly during the holiday season, which is just a few months away.

The state media Global Times published a story Tuesday quoting Zhongyuan Bank chief economist Mei Xinyu, “a veteran expert close to China’s Ministry of Commerce,” in which he said Trump’s maximum pressure efforts are failing.

“The U.S. has realized that its maximum pressure strategy to force China back to the negotiating table has not worked as expected. Washington knows that only through talks can the two sides reach a deal,” he said.

Nankai University professor Liang Qi also was quoted by the Global Times, saying Trump knows his chances of reelection will be hurt by the tariffs.

“Trump is looking for a way out. It also shows that both China and the U.S. are highly dependent on each other, and the practice of imposing tariffs does not necessarily bring China to its knees,” he said. “We also can see that imposing tariffs may harm the interests of the U.S., making it hard for Trump’s reelection.”

Trump, who on numerous occasions has said American consumers aren’t paying for his tariffs, told reporters he was suspending them for the Christmas season “in case it had an impact on shopping,” adding that the delay would “help a lot of people.”

So clearly, he has gotten some indication that his tariffs are hurting U.S. consumers and businesses.

Global Times Editor in Chief Hu Xijin said China wants the additional tariffs removed, as was agreed upon at the Osaka G-20 summit, before it resumes purchasing U.S. agricultural products.

What Wall Street Is Saying

Hayman Capital Management’s Kyle Bass said “it does look like President Trump has blinked,” and that when Trump threatens tariffs “every time it makes the stock market go down a few hundred points” and so the president “backs away.”

“It looks like he doesn’t want the price of iPhones going up into Christmas,” Bass said Tuesday on CNBC’s “Squawk Alley” program. “The Chinese are going to read this as a key weakness.”

Kynikos Associates managing partner Jim Chanos, who goes by “Diogenes” @WallStCynic on Twitter, said Trump painted himself into a corner with the latest announcement.

For its part, China has not backed off. Beijing announced last week it would stop buying U.S. agricultural products and let its currency weaken.

Safanad CIO John Rutledge said both sides are feeling the pain of the trade war. In China, President Xi Jinping is facing pressure to show strength. In the U.S., Trump is facing mounting political pressure and increased costs to consumers.

It’s very important, Rutledge said, for the likes of adviser Larry Kudlow, Secretary of Commerce Wilbur Ross and Treasury Secretary Steve Mnuchin, whom he deems “market thinkers,” to win out over trade hawk adviser Peter Navarro.

Rutledge said it’s important for investors to take things “one day and one data point” at a time, according to CNBC.

Gluskin Sheff + Associates Chief Economist and Strategist David Rosenberg said Trump blinked in a tweet Tuesday.

The two sides are set to meet again in two weeks to discuss trade.

Compass Point Research’s Isaac Boltansky also wrote in a note to investors that they shouldn’t expect a trade deal before the 2020 election, according to CNBC.

“These developments are modestly positive, especially compared to the recent torrent of negative news, but we caution against viewing the tariff delay as anything more than an attempt to partially shield the American consumer heading into the holiday season,” he wrote. “We continue to believe that a broad deal will not emerge prior to the 2020 election.”

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