Not only are companies ratcheting up prices of imported products to offset the cost of tariffs, they’re also raising the cost of goods unaffected by those taxes, a New York Federal Reserve survey and Beige Book report released Wednesday found.
The survey was administered to about 110 manufacturers and more than 200 service firms in New York and New Jersey between May 2 and May 9. At the time, Trump had not yet reduced tariffs on China from 145% to 30%. An increase on levies for steel and aluminum from 25% to 50% went into effect on Wednesday.
The Trump administration is also preparing for a Supreme Court showdown on the constitutionality of the tariffs, following a U.S. court back-and-forth on whether the president had the authority to impose the taxes.
A “significant share” of companies surveyed by the Fed in early May said they increased prices of products not impacted by President Donald Trump’s sweeping levies, part of a strategy to brace for the wider impact of the taxes.
“A heavy construction equipment supplier said they raised prices on goods unaffected by tariffs to enjoy the extra margin before tariffs increased their costs,” the Beige Book report said.
