Key Facts
• June 4, 2025: NY Fed report reveals tariff impact on businesses.
• Majority of firms passed on tariff costs to customers via price hikes.
• 75% of manufacturers and service providers adjusted prices due to tariffs.
• 33% of manufacturers fully passed on costs; 45% for service providers.
• Tariff rate expectations: 35% for manufacturers, 26% for service providers.
• Price increases: 20% for manufacturers, 15% for service providers.
• Report covers May 2–9, 2025, after tariffs on China rose to 145%.
• Some firms mitigated costs by switching suppliers or negotiating lower prices.
Summary
A June 4, 2025, report from the New York Federal Reserve highlights how businesses in the region are responding to increased tariffs under former President Donald Trump’s policies. The majority of companies have transferred at least part of the additional costs to customers through price increases. Approximately 75% of manufacturers and service providers adjusted prices, with 33% of manufacturers and 45% of service providers fully passing on the costs. The report, based on data from early May 2025, notes that tariff rate expectations were 35% for manufacturers and 26% for service providers, with corresponding price increases of 20% and 15%, respectively. Despite these adjustments, some firms managed to offset costs by switching suppliers or negotiating lower prices. The findings underscore the significant challenges and uncertainties businesses face in adapting to tariff hikes.
