The CEO of the U.S. Chamber of Commerce told CNBC on Tuesday that President Donald Trump delayed tariffs in part to avoid a recession during the upcoming 2020 presidential election.
“Nobody wants to run for president, on either party, in the middle of a recession,” Tom Donohue said on “Closing Bell. “
Earlier Tuesday, the U.S. Trade Representative announced that new tariffs, originally scheduled to go into effect Sept. 1, would be delayed until Dec. 15 for some consumer items. In addition, some products are being removed from the new tariff list altogether due to “health and security factors.”
Trump told reporters that his decision to delay the tariffs was to avoid impact on Christmas shopping. The delay applies to electronics, video game consoles, certain clothing goods, shoes and toys.
In response to a question about how much this postponement is about a possible trade deal between U.S. and China rather than giving American businesses time to adjust, Donohue said this adjustment is “common to the way we’ve seen the administration work.”
The administration tends to “set up a difficult objective, [then] make adjustments going on further based on the way people operate and react and more importantly, [see] how the markets and the political process work.”
“I think taking these steps [keeps a recession] from happening,” he said.
Markets rallied on the announcement on Tuesday. The Dow Jones Industrial Average jumped as much as 529 points, or 1.44%. The S&P 500 climbed 1.48%, and the Nasdaq Composite rose 1.95%.
Shares of retailers also surged on the news. The SPDR S&P Retail ETF was up 1.6%, and Best Buy soared more than 6%.
“I think the White House is recognizing what reality is for them. I think we’re doing better than we were yesterday,” Donohue told CNBC.