Some U.S. businesses are putting capital projects on hold due to the uncertainty over the Trump administration’s tariffs, according to the Federal Reserve.Small Business Impact of a Trade War With China
Despite bullish stock markets and strong labor markets, the uncertainty around trade policy “eventually could have negative effects,” the Federal Reserve Bank’s Board of Governors said in the minutes for its June 14 meeting.
In some areas, the Fed found that “plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy,” indicating that businesses are not investing in growing their production capacity.
In the steel and aluminum industries particularly — two of the first sectors President Donald Trump targeted with tariffs on foreign imports — businesses “expected higher prices as a result of the tariffs on these products but had not planned any new investments to increase capacity.”
Trump is far from the first president to try to revive the steel and aluminum industries in t