Fed’s Beige Book: Tariff-induced price hikes, trade worries spotlighted

A new report issued by the Federal Reserve showed that American companies report increased costs due to customs tariffs, which they expect to be largely transferred to consumers in the form of higher prices.

On Wednesday, the Federal Reserve released its last version of the Beige book, which summarizes economic conditions in both the 12 regional regions in the Federal Reserve and is published eight times a year. The uncertainty about the international trade policy is “widespread” and causes the tariff interests on imported goods, which President Donald Trump has increased in his efforts to restore global trade balance, causing high costs of companies and consumers alike.

“Most regions have noticed that companies expect a high growth cost of the production cost of customs tariffs. Many companies have already received notifications from suppliers that the costs will increase,” said the Federal Reserve Summary. “The companies have reported the addition of additional introductory fees or the failure of pricing horizons to calculate the uninterrupted commercial policy.”

“Most companies that are expected to pass through additional costs for consumers. However, there were reports on margin pressure amid increased costs, as demand remained lukewarm in some sectors, especially for companies facing the consumer.”

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In the Boston region, the Federal Reserve pointed out that “retail and manufacturing contacts have warned that the cost increases associated with definitions, although it still must be determined, can lead to a large pass by its production prices.”

“The expected success rates were large, as more than half of the manufacturers passed completely, most of them without delay. One of the manufacturers has shortened the duration of their prices to 30 days in anticipation of the need to quickly control prices,” continued.

Boston also noted that “traveling from Canada has decreased significantly, and contacts are afraid that summer travel from Europe and China may also suffer due to negative reactions to the US tariff policies.”

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Car dealers reported an increase in demand, as consumers look forward to making purchases before valid and raised prices. (Frederic J. Brown / AFP via Getty Images / Getty Images)

The auto industry witnessed at least a short -term batch of uncertainty in the customs tariff, as consumers rushed to buy cars 25 % of imported car tariffs, according to reports from many federal areas.

“Car dealers have reported a strong sales increase after a slight increase in the last period. Multiple contacts have highlighted that sales have recorded record levels in March. However, all our auto communication authorities attributed this batch to purchases forward to move forward in a potential tariff and do not expect the force to continue in demand.”

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Home builders note an increase in cost due to the definitions of building materials. (Angus Mordant / Bloomberg via Getty Images / Getty Images)

House builders in many federal reserve areas indicated that the customs tariff will increase construction costs and cause slowdown due to uncertainty.

The graphics also had an effect on the charging industry. The Richmond Fed team indicated that one of the ports in its area reported a 25 % “unexpected and disappointing” decrease in the monthly export shipments.

The Trump administration plan was also observed to impose the port call fees on Chinese ships to support local ships as a source of cost pressure.

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“The port contacts were particularly concerned about the proposed call tax tax on Chinese ships, which, at their estimates, can escalate the costs of processing goods,” wrote The Richmond Fed.