Published
September 18, 2019
Earlier this month, we learned that Fortune 500 companies are increasingly concerned about trade tensions and tariffs. We also saw evidence that small manufacturers are losing confidence, with lower revenue expectations and reduced hiring plans. And now, it seems this concern is spreading to middle-sized companies.
According to this quarter’s RSM US Middle Market Business Index (MMBI) 40% of middle market leaders reported that tariffs on imported goods are posing challenges for their businesses and 26% cited a negative impact from retaliatory export tariffs. Overall, the MMBI dropped to 129.4 in Q3, down from the 132.3 last quarter.
Here’s more from the report…and it’s not pretty:
That’s right, it could already be worse. We might just not realize it yet. All this trade uncertainty can lead to real action by business decision-makers. Looming tariffs can quickly translate into less investment, less hiring, and less growth. Something the MMBI elegantly calls “an uncertainty tax.”
As Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer, puts it:
It’s not too late, but time is of the essence. The tariffs could cost every American household between $600-$1,000 by the end of the year. Already, consumer sentiment is down and over a third (38%) of survey respondents to a recent University of Michigan poll made “spontaneous references” to the negative impacts of tariffs. Consumer resilience has been one of the most durable characteristics of the recent expansion, and these warning signs should be taken seriously.
The good news is that early next month trade negotiators are scheduled to meet for “high-level talks” on the U.S./China tariffs. Let’s hope they got the message from consumers and businesses that tariffs are not the way to go. And that they decide to give the economy a sudden boost by removing these unnecessary and burdensome tariffs. And let’s also hope legislators on Capitol Hill do their part, find some middle ground and pass USMCA.
If they do, we all stand to win.
About the authors
Thaddeus Swanek
Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.