What Texas executives really think about tariffs

HOUSTON – The Houston Chronicle reports, “Chaos.” “Nonsense.” “Absolutely terrible.” In public, at least, many business leaders have been somewhat circumspect since President Donald Trump announced sweeping worldwide tariffs on April 2, or as he called it, “Liberation Day.” But Texas executives were a bit more candid in a series of recent surveys conducted by the Federal Reserve Bank of Dallas, which invited them to comment on the tariffs anonymously. “A lack of a plan and the arbitrary nature of the tariffs are killing business,” said one manufacturing executive in computer and electronic product manufacturing. The Dallas Fed surveys hundreds of executives in the manufacturing, service and retail sectors each month about business conditions, inviting them to elaborate with anonymous comments. Last month’s surveys, conducted April 15–23, included a series of special questions on the impact of Trump’s tariffs.

Nearly 60% of the roughly 350 respondents from across the state said they expected higher tariffs to have a negative impact on their businesses this year; only 3.2% were expecting a positive impact. About 55% of those expecting a negative impact said they plan to pass at least some portion of the cost increases through to their customers. At the time of the most recent survey, Trump had announced a pause on many of the tariffs he had just proposed, after the “Liberation Day” proposals sent markets reeling and raised concerns about the potential for inflation and recession. But Trump was planning to proceed with tariffs on major trading partners including China, which was among the countries responding with retaliatory tariffs. “I cannot emphasize enough how absolutely terrible this is in the short term,” said another. “The daily changes in policy make it impossible to attract new business currently because we cannot quote it with accuracy.” An executive in professional services described the situation as “a self-inflicted pandemic all over again.”