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August 16, 2018

Just Released: August Regional Survey—Businesses See Tariffs Raising Prices

This week, we published our August surveys of regional manufacturers and service firms. Our Supplemental Survey Report, released this morning, reveals how these businesses view the effects of recent trade policy on their costs, prices, sales, and profits. The results suggest that recent tariffs are raising both input costs and selling prices for local businesses, and these effects appear to be more widespread for manufacturers than for service firms.

At the outset of the survey, firms are asked how much of their revenue comes from foreign customers. About three-quarters of manufacturing firms and a little more than half of service firms in our surveys report having at least some foreign customers. While manufacturers largely export goods, service firms provide a wide range of offerings to foreign customers, ranging from tourism services to legal, financial, and consulting services.

Roughly two-thirds of manufacturing respondents indicated that tariffs have already had at least some upward effect on their overall input costs, and more than 70 percent anticipate that changes in trade policy will push up input costs in 2018 and 2019. Moreover, roughly half of manufacturing respondents expect trade policy to have an upward effect on their selling prices in both years. Among service sector firms, 44 percent are already seeing input price increases from tariffs, almost half see an upward effect on input prices in 2018, and well over half anticipate an upward effect in 2019. In addition to effects on prices, one in three manufacturers and one in four service firms see trade policy changes having a downward effect on sales to foreign customers in 2018. Sales to domestic customers are not seen to be affected, on balance.

Roughly 50 percent of manufacturers and 40 percent of service firms see trade policy changes as having a negative effect on profits in 2018. (Note that this does not necessarily mean that profits are projected to decline, only that they are expected to be lower than they otherwise would have been.) In addition to offering an assessment of the effects of tariffs and other trade policies on business costs and profits, a number of survey respondents commented that uncertainty about future trade policy has made planning and investing more challenging.


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Bram_jasonJason Bram is an officer in the Federal Reserve Bank of New York’s Research and Statistics Group.

Deitz_richardRichard Deitz is an assistant vice president in the Bank’s Research and Statistics Group.

How to cite this blog post:

Jason Bram and Richard Deitz, “Just Released: August Regional Survey—Businesses See Tariffs Raising Prices,” Federal Reserve Bank of New York Liberty Street Economics (blog), August 16,2018,

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