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Uncertainty about tariffs became “pervasive” among business and community leaders around the country in April, according to a report by the Federal Reserve.
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Business leaders said uncertainty is making it hard to invest and plan for the future.
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The report highlighted the “on the ground” consequences of President Donald Trump’s rapidly shifting trade war.
Everyone is talking about tariffs, and no one quite knows what to make of them.
That’s according to the Federal Reserve’s “Beige Book” published Wednesday. The report showed that among business and community leaders around the country, uncertainty about tariffs intensified in April as President Donald Trump steered his trade war in unpredictable directions. Some businesses braced for price increases from the import taxes, some prepared for layoffs, and some found themselves unable to make plans.
The Beige Book, a compilation of reports from business, nonprofit, and community leaders in local Fed districts around the country, gave a snapshot of how Trump’s trade policies are affecting Main Street.
“Economic activity was little changed since the previous report, but uncertainty around international trade policy was pervasive across reports,” Fed economists wrote.
April’s report showed worries about tariffs have ramped up from an already high level in March. The reports mentioned “uncertainty” or a variation 89 times in April, up from 47 in March. “Tariffs” came up 107 times, up from 49. By contrast, in April 2024, when tariffs were just a gleam in then-candidate Trump’s eye, “uncertainty” came up 13 times and tariffs not at all.
Experts have long warned that Trump’s on-again, off-again campaign of imposing import taxes could stifle the economy by forcing businesses to delay making investments, and the report showed that those warnings are starting to come true, especially in the Richmond district.
“Several contacts put investments on hold due to increased uncertainty,” the report said. “A military equipment manufacturer reported conditions being ‘too chaotic’ to make any decisions on future investments.”
In Atlanta, “Contacts in lumber and wood products manufacturing experienced slowing demand amid ambiguity surrounding tariffs—one firm noted having ‘zero faith in even a 6-month forecast,’ and that the biggest hurdle to expansion and mergers and acquisitions was not knowing how trade policy will settle out.”
It was the same story all across the country, with people in the construction and real estate business in Minnesota telling the Fed: “New projects have dried up completely in the first quarter. …Uncertainty and chaos at the federal level has frozen pretty much all activity.” Another said “clients are hesitant to proceed with design until some sort of certainty and predictability comes back.”
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