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An aerial perspective captured on April 18, 2025, reveals a container ship docked at the Port of Oakland in California.
According to a recent report from the Federal Reserve, companies affected by President Donald Trump’s tariffs are actively exploring ways to transfer escalating costs to their customers. This comes in light of Trump’s imposition of comprehensive tariffs on various U.S. imports and additional duties specifically targeting Chinese goods. The Fed’s “Beige Book” provided insights into the businesses’ strategies as they navigate this challenging economic landscape.
The report mentioned that companies have started receiving notifications from their suppliers about rising costs and are assessing their options for managing these price increases, albeit with hesitation regarding their ability to pass these costs onto consumers. “Most Districts noted that firms expected elevated input cost growth resulting from tariffs,” the report highlighted. “Many firms have already received notices from suppliers that costs would be increasing.”
Overall, the report, released approximately every seven weeks, described economic growth as remaining “little changed” from its previous findings in early March, yet it emphasized that widespread uncertainty over international trade policies loomed large across the Fed’s 12 districts.
During this report’s timeframe, which included Trump’s significant announcement on April 2 regarding blanket tariffs, prices experienced a general uptick. Employment figures also showed minimal change, although there was a noted decline in government job numbers.
The findings indicated, “Firms reported adding tariff surcharges or shortening pricing horizons to account for uncertain trade policy.” While most businesses anticipated successfully passing on the additional costs, there were also indications of shrinking profit margins due to rising expenses and lukewarm demand, particularly among consumer-oriented companies.
In the New York region, prices surged notably for food, insurance, and construction materials. Manufacturers and suppliers were also reported to be instituting surcharges in response to increased shipment costs.
Moreover, the ongoing trade dispute with Canada is beginning to exhibit negative effects, with fewer tourists booking accommodations in New York City, and at least one technology firm noted a decline in business connections within Canada.
The outlook for service-oriented businesses grew more pessimistic, with contacts anticipating a significant decrease in activity in the near future. A pronounced retreat in planned investments was reported among firms in the service sector.
The report also pointed to challenges faced by service organizations reliant on government funding, particularly since the White House began re-evaluating federal aid allocations. It specifically mentioned food banks in New York experiencing cuts to programs and staffing.
“Contacts at non-profits and other community-based organizations expressed significant concern about the future of federal funding and services support, creating challenges in staffing, strategy, and planning,” the report stated.
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