American businesses are already freaking out about Trump's tariffs

  • The Federal Reserve reported in its latest Beige Book that US businesses are wary of President Donald Trump’s new trade policies.
  • In particular, manufacturers were concerned about the sudden spike in the price of steel and aluminium.
  • The businesses said the new tariffs were not a drag on activity yet, but could be in the future.

US businesses are starting to feel the pressure from President Donald Trump’s recent trade policies.

According to the Federal Reserve’s latest Beige Book, a survey of businesses from the various Federal Reserve branches, companies are keeping a close eye on Trump’s recent tariffs and some are already hurting form the moves.

For instance, the Federal Reserve Bank of Boston pointed to concerns from one manufacturer in that district.

“The second [manufacturer] said that punitive tariffs on Chinese aluminium had already had a big effect: ‘Thin gauge foil’ is produced only in China and tariffs raised the price three-fold; the contact argued that ‘these tariffs are now killing high-paying American manufacturing jobs and businesses,'” the report said.

In all, the word “tariff” was mentioned 36 times in the Beige Book. There were no mentions of the word in the previous edition, released in March.

“Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture, and transportation expressed concern about the newly imposed and/or proposed tariffs,” the report said in the section looking at nationwide conditions.

Many manufacturers worried about the dramatic increase in the price of metals after Trump’s new tariffs, which charge a 25% duty on imports of steel and a 10% duty on imports of aluminium.

“There were widespread reports that steel prices rose, sometimes dramatically, due to the new tariff,” the Fed said.

Here’s a sampling of other responses from a few of the various Fed districts:

  • Dallas: “Outlooks, while still optimistic, have become more uncertain due to new tariffs and trade concerns.”
  • Philadelphia: “Of the 22 manufacturing firms that offered general comments, seven mentioned impacts from recent tariffs or proposed tariffs – most noted rising prices or anticipated rising prices; just one firm anticipated greater demand.”
  • Cleveland: “According to contacts, recently imposed tariffs have accelerated price appreciation of steel products, in some cases at double-digit rates. Independent of policy, prices for other commodities have also increased.”
  • Richmond: “A Maryland port saw strong growth in imports and exports compared to last year with import growth slightly outpacing export growth. Several ports noted some uncertainty about what effects the steel tariffs might have on trade.”
  • Chicago: “Manufacturers facing higher steel and aluminium costs because of the new tariffs expected to pass on about half of the increased costs to their customers on average.”

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