WASHINGTON: Businesses across the United States expect President Donald Trump’s tariff plans will force them to raise prices, with some already preemptively doing so, the Federal Reserve said Wednesday.
Trump’s administration has begun imposing both broad-based and targeted tariffs affecting top US trading partners including Canada, Mexico, and China, and has threatened to impose retaliatory levies against other countries from Aril 2.
Last month, after some tariffs on China went into effect, manufacturing firms told the US central bank that they were concerned about the possible impact “of looming trade policy changes,” according to the Fed’s Beige Book survey of economic conditions published Wednesday.
Since then, Trump has hiked tariffs on China from 10 percent to 20 percent, and imposed 25 percent levies — with some exemptions — against Mexico and Canada.
Contacts in most Fed districts said they “expected potential tariffs on inputs would lead them to raise prices, with isolated reports of firms raising prices preemptively,” according to the survey, which was completed on February 24. Trump’s plans to deport millions of undocumented workers has also had an effect on the US economy, with businesses in multiple Fed districts reporting that “rising uncertainty over immigration and other matters was influencing current and future labor demand.”
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