Manufacturing, agriculture firms among those hardest hit by tariffs: survey

Manufacturing, agriculture firms among those hardest hit by tariffs: survey
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Agricultural and manufacturing firms have been among those hardest hit by tariffs stemming from a yearlong trade war, according to a new survey of business economists.

The National Association for Business Economics (NABE) surveyed its members earlier this month, about one year after President TrumpDonald John TrumpTrump says his advice to impeachment defense team is 'just be honest' Trump expands tariffs on steel and aluminum imports CNN's Axelrod says impeachment didn't come up until 80 minutes into focus group MORE’s steel and aluminum tariffs took effect on March 23, 2018.

Business economists’ responses varied greatly depending on the type of firm for which they work.

Three quarters, or 75 percent, of respondents in the goods producing sector — which includes agriculture, mining, construction and manufacturing — reported that recent tariffs have had a negative impact on their firms.

That compares to 40 percent of respondents in the transportation, utilities, information and communications sector who said the tariffs had a negative impact; 11 percent of respondents in the finance, insurance and real-estate sector; and 25 percent of respondents in the services sector.


Overall, 28 percent reported that recents tariffs have had a negative impact on their businesses, while 1 percent said they had a positive impact. A plurality of respondents, 43 percent, said they had no impact on their firms while another 13 percent said that the tariffs have been "neutral" for their firms.

A little over 1 in 5 respondents said that tariffs have led to higher costs at their companies in the past year, with 13 percent reporting a negative impact on sales. Among the respondents in the goods producing sector, 67 percent reported higher costs, 50 percent reported higher selling prices and 42 percent reported a negative impact on sales.

Fifty-four percent of respondents in the goods producing sector reported sourcing changes or supply chain shifts, 31 percent reported delayed investments and 23 percent reported delayed inventory because of actual or potential trade policy changes. Among all respondents, two-thirds reported no changes to hiring and investment as a result of actual or potential trade activity.

The survey results come as Treasury Secretary Steven MnuchinSteven Terner MnuchinCommerce Department withdraws Huawei rule after Pentagon pushback: reports  Hillicon Valley — Presented by Philip Morris International — Bezos phone breach raises fears over Saudi hacking | Amazon seeks to halt Microsoft's work on 'war cloud' | Lawmakers unveil surveillance reform bill On The Money — Presented by Wells Fargo — Mnuchin says officials working on new tax cuts | Watchdog charges former execs over Wells Fargo accounts scandal | Study questions Biden, Sanders tax plan claims MORE and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerGOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 Pelosi sounds hopeful on new NAFTA deal despite tensions with White House MORE travel to China to begin trade talks on Tuesday. The Chinese government will send a delegation to Washington for more discussions about trade starting on May 8, the White House said.

The U.S. and China both put tariffs on each other's products last year, but Trump agreed in December not to raise tariffs further while the countries work to reach a deal.

Trump has made trade one of his top economic issues. He touted the economy on Friday, after the Commerce Department reported economic growth in the first quarter of this year of 3.2 percent.

NABE also asked its members about the Federal Reserve’s pause in raising interest rates. Trump has forcefully pushed back against rate increases, arguing they are stifling economic growth.

Half of respondents said they expect the pause in rate increases to be favorable for business conditions at their firms, while 7 percent said they expect it to be unfavorable and 39 percent said it will have no change.

NABE surveyed 116 of its members who work for private sector firms or industry trade associations from April 1-10.