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

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

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 pushes back on recent polling data, says internal numbers are 'strongest we've had so far' Illinois state lawmaker apologizes for photos depicting mock assassination of Trump Scaramucci assembling team of former Cabinet members to speak out against Trump 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.

ADVERTISEMENT

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 MnuchinPelosi warns Mnuchin to stop 'illegal' .3B cut to foreign aid Trump phoned bank CEOs as stock market plunged Wednesday: report The Hill's Morning Report — Trump and the new Israel-'squad' controversy MORE and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerOn The Money: Economy adds 164K jobs in July | Trump signs two-year budget deal, but border showdown looms | US, EU strike deal on beef exports Chinese, US negotiators fine-tuning details of trade agreement: report The Trump economy keeps roaring ahead 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.