American companies say they are worried about a rebound in inflation, due in particular to the general increase in customs duties announced by Donald Trump, but are nevertheless optimistic for the months to come, according to a survey published Wednesday by the Fed .
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“Businesses in several regions indicated that tariffs represent a significant upward risk to inflation,” the US Central Bank said in its Beige Book, a survey of business officials conducted between late October and mid-November.
Donald Trump, during his first term, made tariff increases the backbone of his trade policy.
For his return to the White House, he has already promised customs duties of 25% against Canada and Mexico, theoretically protected by a free trade agreement.
The prices of many imported products are therefore expected to rise.
Thus, in the manufacturing region of Philadelphia (Pennsylvania), “many companies express their concerns about the inflationary effects of potential customs duties,” underlines the Fed.
And, in the Saint-Louis region (Missouri), “companies are increasing their inventories in anticipation of potential customs duties on imports,” it is further indicated.
Inflation rebounded in October, to 2.3% over one year, against 2.1% in September, according to the PCE index, favored by the Fed, and which it wants to reduce to 2%.
“Many companies […] noted a further increase in price sensitivity among consumers, as well as several reports of increased sensitivity to quality.
Despite this, and “even if the growth in economic activity has been generally weak, growth expectations have increased moderately in most geographic areas and sectors”, further notes the “Beige book”.
Those surveyed “expressed optimism about an increase in demand in the coming months,” it is specified.
