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President Trump wrapped up Chinese President Xi Jinping’s state visit on Sept. 25 sounding thrilled. “I think our farmers are going to be very happy,” he told reporters in the Oval Office. (1)
Farmers may well be. The question for everybody else is simpler: Will the toys, ornaments and small appliances you buy this Christmas actually cost less?
The White House says the two countries agreed on “more favorable tariff treatment” for $30 billion of goods going each way. On the U.S. side, the list includes small appliances, toys, holiday decorations and children’s car seats. (2)
The detailed product lists came out Sept. 28. For more than 90% of the covered items, tariffs are set to drop to standard “most favored nation” rates, which are often in the single digits. (3)
That’s real. So is this: The Yale Budget Lab estimates tariffs are costing the average household about $1,100 a year. (4) And consumer prices were up 3.4% over the 12 months through August. (5)
I’ve been a CPA since 1981. When a politician announces a deal, I don’t look at the adjectives. I look at the dollars, the dates and the fine print. Here are five things this deal means for your wallet this holiday season, and what I’d do about each one.
1. The deal is smaller than it sounds
Thirty billion dollars sounds enormous. Compared with everything the two countries trade, it isn’t.
The new lists cover just 77 categories of Chinese goods, such as microwave ovens, artificial flowers and weighing scales. China’s list of U.S. goods runs to more than 1,600 items. (6)
One trade analyst told Al Jazeera that both sides mostly listed goods that “do not move the needle” on overall trade. (6)
Bottom line: Tariffs on most Chinese imports aren’t changing. China still faced an average effective U.S. tariff rate of 22.8% as of July, the highest of any country, according to the Penn Wharton Budget Model. (7)
2. This year’s Christmas stock is already here
Here’s the part that matters most for your gift list. The toys and decorations you’ll see on store shelves in November were ordered and shipped months ago, at the old tariff rates.
As the Associated Press put it, most of this year’s Christmas goods are already on the way, so the tariff reductions may have limited effect for them, at least for now. (3)
And the lists are still recommendations. No effective date has been announced. (2)(3)
Nearly 80% of toys sold in the U.S. come from China, according to The Toy Association’s figures from last year. (8) So if relief shows up, it will likely be next year, not under this year’s tree.
3. Don’t let “prices are coming down” loosen your budget
The biggest risk of a feel-good headline isn’t that it’s wrong. It’s that it gets people to relax.
If you head into the holidays thinking everything’s about to get cheaper, you’ll spend like it. Then January arrives, and so does the credit card bill.
So set your holiday budget now, based on what things cost today. Write down a dollar limit for each person on your list, and stick to it.
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Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
4. Find the money in bills you’re already paying
You can’t control tariff rates. You can control your monthly bills, and that’s where the easiest holiday money is hiding.
When I review a budget, the first place I look isn’t the big stuff. It’s the small monthly charges nobody has looked at in years.
Forgotten streaming services, free trials that never ended, bills that creep up every year — recurring charges are the easiest money leak to miss. Rocket Money connects securely to your accounts and puts every subscription on one screen — cancel the ones you don’t want in a few taps.
It negotiates cable, internet, and phone bills and flags fee hikes before they hit. Members have saved over $880 million in canceled subscriptions to date. See every subscription now.
5. Stack the discounts that really exist
Tariff relief may be a 2027 story. Discounts are available right now.
If you’re 50 or older and travel to see family over the holidays, one membership can pay for itself fast.
Nearly any adult can join AARP, and members save on hundreds of everyday purchases, including up to 30% off rental cars at Avis and Budget and up to 20% off at participating hotels.
You’ll also get the AARP Fraud Watch Network, which comes in handy during scam-heavy holiday shopping season. At as low as $15 for your first year with auto-renewal, a single use of one travel or dining benefit can cover the cost.
Also remember that the best prices on toys and decorations often come after the holiday, not before. Buying next year’s ornaments in late December is an old trick that still works.
The bottom line
Credit where it’s due. Lower tariffs on everyday consumer goods are a step in the right direction, and if the cuts take effect, prices on some items should ease.
But this deal covers a sliver of what we buy from China. It has no start date yet. And this year’s holiday merchandise is already priced.
So cheer the deal if you like. Just don’t spend the savings before they show up. The best holiday gift you can give yourself is a January with no credit card hangover.
Sources: 1. Fox News; 2. The White House; 3. Associated Press (via Spectrum News); 4. The Budget Lab at Yale; 5. U.S. Bureau of Labor Statistics; 6. Al Jazeera; 7. Penn Wharton Budget Model; 8. PBS News
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