Trade war hurting factories, service firms, NY Fed poll finds
Container ships docked at Port Newark, New Jersey. NY factories and service firms said higher taxes on imports and exports will hurt them this year. Credit: Getty Images/John Moore
The trade war is hurting factories across New York State and service firms in the metropolitan area, according to two polls released Thursday.
More than half of the manufacturers surveyed said higher tariffs — taxes on both imports and exports — will have a “negative effect on the bottom line” this year, the Federal Reserve Bank of New York said in a statement. The bank polled about 100 factories across the state earlier this month.
Roughly 40 percent of service firms also said their 2018 profits will be negatively impacted by the increased tariffs. The bank polled about 100 retailers and other service firms on Long Island, in New York City and the northern suburbs.
The Trump administration has moved aggressively to boost tariffs on solar panels, washing machines, steel, aluminum and other imported goods. China, Canada, Europe and others have responded by slapping higher taxes on U.S.-made goods.
Asked by the New York Fed about the effect of tariffs on next year’s bottom line, slightly fewer manufacturers predicted a negative impact while the number of service firms was unchanged.
About three in four factories said they are paying more for raw materials coming from overseas, according to the poll. But only about half said they have passed along the increased costs to customers in the form of higher prices.
Among service firms, about half said they are paying more for imported goods but only 32 percent have raised their prices in response, according to the poll.
“As for sales, both manufacturers and service firms said they saw a negative effect, on balance, on sales to foreign customers but little or no effect on domestic sales,” the bank said.
The typical manufacturer derives about 12 percent of its revenue from exporting; among service firms, it’s 10 percent.
Canada and Europe are the top foreign markets for New York companies, with factories saying 46 percent of their export-related revenue is tied to Canada.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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