New York
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Texas manufacturers continue to express frustration over the Trump administration’s volatile tariff playbook and the impact of high borrowing costs.
“Tariff Bingo is tough,” one furniture manufacturer told the Federal Reserve Bank of Dallas in a survey released Monday. “We are probably going out of business within 90 days.”
A transportation equipment maker warned the trucking industry “remains depressed” as the industry grapples with “ever-changing tariffs.”
“It seems like there is lots of uncertainty in our industry with these goofy tariffs being a big part of the reason,” a printing manufacturing executive said, adding they are “very worried about what the next six months will bring.”
The comments underscore how a key Trump program – historically high tariffs – is hurting some of the same businesses it’s intended to help.
President Donald Trump’s sweeping tariffs are designed to boost domestic manufacturing jobs, giving companies a major incentive make more products in America instead of importing them.
However, so far, the chaotic policy rollout has paralyzed some businesses and heaped even more pressure on US manufacturing.
For instance, nearly half (48%) of businesses surveyed by the Dallas Fed said they’ve been hurt by higher tariffs this year. The pain was more widespread for manufacturers, where 70% of those surveyed said they’ve been negatively impacted by higher tariffs this year.
About 80% of the businesses hurt by tariff hikes said they have either passed cost increases to customers or plan to.
“These tariffs will increase our costs and will be passed on to our customers’ new orders, which are typically industrial and military users,” a computer and electronics maker told the Dallas Fed.
While the tone of the comments from manufacturers was negative, the Dallas Fed said a metric on new orders turned positive for the first time since January.
Still, high tariffs and significant uncertainty over trade policy have caused the Federal Reserve to hold off on lowering interest rates, for now at least. However, with the labor market on shaky ground, Fed Chair Jerome Powell last week strongly hinted the central bank may need to cut interest rates soon.
“It is time to cut interest rates before it is too late. The world is doing it in order to prepare their economy for the effects of trade tensions,” the electronics executive said.
A machinery maker complained that the Trump administration’s promise to accelerate oil production hasn’t panned out.
“’Drill, baby, drill’ was a great mantra, but it isn’t delivering to the folks in the industry,” the executive said. “And what’s with a Federal Reserve that refuses to reduce interest rates? Chair (Jerome) Powell should cut the rate now.”
A paper manufacturer expressed hope that Trump’s sweeping tax and spending cut package, known as the One Big Beautiful Bill (OBBB), will help the industry soon.
“We have been treading water since the first of the year and it is starting to get tired,” the executive said. “The OBBB is somewhat of a life preserver but we need activity in manufacturing to pick up sooner than 2-3 years from now.”
