Texas businesses feel the pinch from Trump’s tariffs, Fed survey finds

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DALLAS — Uncertainty spurred by President Donald Trump’s trade policies is having a chilling effect on Texas businesses — a majority of which say consumers will ultimately pay the price of higher tariffs.

Nearly 60% of Texas business owners say the Trump administration’s back-and-forth on tariffs, a tax on imported goods, has already harmed their businesses, recent survey results by the Federal Reserve Bank of Dallas show.

The constant change in policies has made it more difficult for businesses to plan ahead, forcing them to put off hiring and investing.

“Tariffs keep changing, so it's hard to make decisions right now,” one business owner told the Dallas Fed.

Once those tariffs are in full swing, a majority of business owners said they expect the new levies to bite into profits, raise costs for businesses, and harm their business in the long run. More than 75% said they would pass increased costs from tariffs on to the consumer. Most said they’d do so within three months of tariffs taking effect.

The April survey results come from the Dallas Fed, an arm of the Federal Reserve System. The Dallas Fed regularly surveys hundreds of Texas business owners across a range of industries to gauge their feelings about the economy, their business outlook and what effects policies have on their business.

Trump has pursued tariffs on goods produced in other countries as a way to push consumers to buy more American-made goods, compel companies to relocate their manufacturing facilities in the U.S. and eliminate what he believes is an unfair trade imbalance between the U.S. and other countries. Economists have warned that families will bear higher costs as a result of tariffs, and that the country’s economic output will suffer.

Trump enacted a 10% baseline tariff on all countries in April, but initiated a 90-day pause on many additional tariffs targeted at specific countries he announced in April after global markets panicked. The administration has since sought to negotiate tariffs with individual countries. Trump said Friday his administration can’t negotiate with every country and that many will see higher tariff rates without one-on-one talks with the U.S.

More than two-thirds of business owners said they expect the cost of doing business to rise owing to higher material and equipment costs. A plurality expects revenue to fall and that they’ll pull back on hiring, production and investment.

Not every business said they plan to hike prices as a result of tariffs. Some 44% of businesses surveyed by the Dallas Fed said they’d absorb higher costs. Another 14% said they’d scale back their operations or shutter their business entirely.

Some business owners plan to behave in ways Trump intended in response to tariffs. About 29% said they plan to find new domestic suppliers should they face higher duties on foreign goods. But less than 6% said they’d relocate production or services stateside.

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