The president of the Federal Reserve, Jerome Powell, said that President Donald Trump’s tariffs are larger than expected, which increases the risks of greater inflation.
A new Federal Reserve report showed that US companies report higher costs due to tariffs, which hope to transmit consumers to consumers in the form of higher prices.
The Federal Reserve on Wednesday launched its latest edition of the Book Beige, which summarizes the economic conditions in each of the 12 regional districts of the Fed and is published eight times a year. The uncertainty about international commercial policy is “generalized” and concerns about tariffs on imported goods, which President Donald Trump has increased in his effort to rebalance global trade, are causing costs to increase both for companies and consumers.
“Most of the districts indicated that companies expected a high growth of the cost of production resulting from tariffs. Many companies have already received notices from suppliers that costs would increase,” said the National Fed summary. “Companies reported adding tariff surcharges or shortening price horizons to take into account the uncertain commercial policy.”
“Most companies expected to go through additional costs to consumers. However, there were reports on margin compression amid augmented costs, since demand remained warm in some sectors, especially for consumer -oriented companies,” he added.
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Tariffs are taxes on imported goods that are paid by importers who often pass the highest costs to consumers through higher prices. (Sam Wolfe / Bloomberg through Getty Images / Getty Images)
In the Boston district, the Fed said that “retail and manufacturing contacts warned that increases in costs linked to tariffs, although they have not yet been determined, could lead to a significant step for their production prices.”
“The expected passage rates were substantial, with more than half of the manufacturers projecting a full step, mainly without delays. A manufacturer shortened the duration of their 30 -day price contributions in advance of the need to adjust prices quickly,” he continued.
The Boston district also pointed out that “trips from Canada decreased significantly, and contacts feared summer trips from Europe and China could also suffer due to negative reactions to the tariff policies of the United States.”
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Automobile dealers reported an increase in demand, since consumers sought to make purchases before tariffs came into force and increased prices. (Frederic J. Brown / AFP through Getty Images / Getty Images)
The automotive industry has seen at least one short -term impulse of tariff uncertainty, since consumers rushed to buy cars ahead of 25% of tariffs on imported cars, according to reports from several Fed districts.
“Car concessionaires reported a strong increase in sales after a slight increase in the last period. Multiple contacts stressed that sales reached the highest record in March. However, all our contacts in the automotive industry attributed this impulse to a retention of purchases of vehicles to advance to possible tariffs and not expect the strength of the demand to continue,” he wrote the Fed of Philadelphia.
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Housing builders observed cost increases due to tariffs on construction materials. (Angus Mordant / Bloomberg through Getty Images / Getty Images)
Housing builders in Multiple Fed districts observed that tariffs will increase construction costs and cause a deceleration in demand due to uncertainty.
Tariffs have also had an impact on the shipping industry. Richmond’s Fed said one of the ports in its district reported an “unexpected and disappointing 25% decrease in export shipments month by month.
The Trump administration plan to impose a port -call rate in Chinese ships to support national naval construction was also observed as a source of cost pressures.
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“The port contacts were particularly concerned about the tax proposed to the call of Puerto on Chinese ships that, according to their estimates, could quadruple the cost management costs. Some ports received billionaire tariffs on Chinese cranes that were already ordered and greased as tariffs and are now subject to the rates,” wrote the Richmond Fed.
