The Federal Reserve (FED) Beige Book: Tariffs mentioned 107 times, economic outlook worsens in multiple regions.

Source: Jin10

According to the Federal Reserve's Beige Book survey of contacts in various regions, in recent weeks, Trump's uncertainty regarding tariff policies for U.S. trading partners has been particularly prominent.

The survey released on Wednesday showed: "Since the last report, there has been little change in economic activity, but uncertainty regarding international trade policies is widespread across all regions."

In this report from the Federal Reserve, the term "tariffs" was mentioned 107 times, more than double the number of mentions in the previous Beige Book. The term "uncertainty" appeared in various forms 89 times. The report states that as economic uncertainty—especially uncertainty surrounding tariffs—grows, the economic outlook in several regions has "significantly deteriorated".

The Atlanta Fed compiled the latest version of the Beige Book using information gathered on or before April 14. The report includes comments and anecdotes about business conditions from the 12 Federal Reserve Districts, collected directly from businesses and other contacts. Federal Reserve officials will hold their next meeting on May 6-7.

Prices have risen in various regions, and companies expect that costs will increase due to tariffs. Many businesses have reported receiving notifications from suppliers about rising costs, and most companies have indicated that they plan to pass higher prices onto consumers.

The report states: "Companies report that in response to uncertain trade policies, they have increased tariff surcharges or shortened pricing terms. Most companies expect to pass the additional costs onto customers. Additionally, some companies report—especially consumer-facing businesses—that due to continued weak demand in certain industries, rising costs have led to compressed profit margins."

In the New York area, businesses report that the price increases for food, insurance, and building materials are particularly noticeable. Manufacturers and distributors indicate that they have begun charging surcharges due to shipping issues. Signs of damage from the US-Canada trade dispute are also beginning to appear. The number of hotel rooms booked by tourists in New York City has decreased, and at least one tech company reports losing business clients from Canada.

The report states: "The outlook for service industry companies has significantly worsened, with relevant individuals expecting business activity to decline sharply in the coming months. Service industry companies report a substantial decrease in planned investments."

Trump's tariff plan is frequently changing, creating significant uncertainty for companies dealing with imported products and raw materials. Trump has suspended plans to impose so-called high "reciprocal" tariffs on dozens of countries, but still implemented a 10% overall baseline tariff. In addition to these tariffs, the Trump administration previously imposed tariffs on steel, aluminum, and automobile imports.

Some companies report that consumers are rushing to buy cars and non-durable goods before price increases related to tariffs, while the number of international visitors has declined. However, overall, non-auto consumption has decreased.

The employment situation has remained largely unchanged or has slightly risen. The report emphasizes the reduction in positions within government departments and institutions receiving government funding. This likely reflects the Trump administration's efforts to reduce the size of the federal workforce and cut costs.

The report stated: "Several regions have reported that companies are taking a wait-and-see attitude towards employment, pausing or slowing down hiring until the economic situation becomes clearer. In addition, there are also sporadic reports that companies are preparing for layoffs."