We just got a new sign that Trump's tariffs are causing panic among US businesses

  • US manufacturers and agricultural producers are starting to worry about President Donald Trump’s trade fights.
  • The latest ISM manufacturing survey showed that metals producers are concerned about the steel and aluminium tariffs.
  • A new index of agricultural producers also showed farmers getting hit by Trump’s trade battle with China.

US businesses are showing signs of concern with President Donald Trump’s recent international trade crackdowns, according to new surveys of manufacturers and farmers.

The Institute for Supply Management’s latest manufacturing survey dipped for the month of April, down to 57.3 from last month’s 59.3. While the reading signifies that the US manufacturing sector is growing, manufacturers in the survey expressed worry about Trump’s new tariffs on steel and aluminium.

Those surveyed said the 25% tariff on steel and 10% tariff on aluminium is already driving up prices and introducing uncertainty.

The “232 and 301 tariffs are very concerning,” one manufacturer told ISM. “Business planning is at a standstill until they are resolved. Significant amount of manpower [on planning and the like] is being expended on these issues.”

Another fabricated metal manufacturer responded that the tariffs have made it difficult to find materials needed to produce their products.

“The recent steel tariffs have made it difficult to source material, and we have had to eliminate two products due to availability and cost of raw material,” the manufacturer said.

Trump on Monday decided to delay the implementation of the steel and aluminium tariffs on six key US allies, but the tariffs that apply to the rest of the world have already caused the metals’ prices to spike. Manufacturers also expressed concern in the Federal Reserve’s latest Beige Book, which surveys businesses from around the US.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the ISM index shows the tariffs are starting to depress activity.

“In one line: Trade war talk seems to be hurting, a bit,” Shepherdson said.

Shepherdson said that while the declines in the index were modest, the slip reflects manufacturers’ concerns over Trump’s trade battle.

“Relatively cold and snowy weather likely hurt a bit, but the bigger story, we think, is uneasiness over tariffs, which might be inducing a bit of caution, at the margin,” he said.

Manufacturers aren’t the only group feeling the tariffs’ pain. The Purdue University/CME Group Ag Economy Barometer, a measure of the US agricultural sector’s health, also showed sharped declines due to trade worries.

According to the report, agricultural producers’ opinions of current economic conditions and future outlook tumbled from the previous month. The overall index fell to its lowest level since March 2017.

In response to Trump’s tariffs on Chinese goods, China’s government announced new restrictions on US exports of pork, soybeans, and other agricultural products. That crackdown is already hitting US farmers, according to the barometer.

“There seems to be a spillover effect that is driving concern among agricultural producers,” said James Mintert, director of Purdue University’s Center for Commercial Agriculture. “Negative perceptions about exports spill over into lower expectations for commodity prices, and then that changes producers’ views about farmland prices.”

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