Concern over tariffs is spreading among industrialists – Economic Policy

According to the Fed's Beige Book, which reports on the economy in June and early July, "industrialists in all regions have expressed concern over tariffs, and in many areas see higher prices and stock-outs attributed to the new trade policy. "

Overall, the activity of the world's largest economy continued to grow moderately, the report said.

He confirms with more insistence the words of Jerome Powell, the president of the Fed, who acknowledged Wednesday in front of the Congress that "worries went up in chorus" within the business circles vis-à- escalation of tariffs between the United States and its trading partners.

"Many companies are affected by this," he admitted, without wishing to comment further on the aggressive trade policy of the Trump administration, which, in order to reduce the trade deficit, imposed significant customs duties on billions of dollars of imports of steel, aluminum and Chinese goods.

The Beige Book, which is published two weeks before the Fed's next monetary meeting (31 July and 1 August), also reports a continued rise in prices, even if it remains "modest to moderate."

"Tariffs have contributed to the rise in prices of metal and wood," says the Fed, which notes however that, for now , the transfer of these increases to consumers at the level of retail prices remains "light".

Wages are still increasing "modest" in most regions, although, given the low unemployment rate (4% ), businesses are struggling to find and "engineers, manufacturing workers, information technology technicians and truck drivers".

To attract and retain their workforce, companies offer overtime, partner with training centers and schools, convert temporary jobs into permanent contracts, and "also raise wages." [19659002] Fears of rising tariffs differ by region. In New York (Northeast), a region that trades heavily with Canada, "uncertainty about trade policy is cited as a major concern". In Boston, there are fears that "trade tensions will weaken international tourism."

In Cleveland (North), the business community observes that consumers are accelerating some purchases, fearing future price increases related to Tariff Application.

In the Saint Louis (Midwest) area, building professionals complained of rising metal prices, while farmers saw a drop in soybean prices, one of the US products Imported by Chinese Tariff Reprisals