More than nine months after the U.S. imposed tariffs on every other country, new local data has come out on the negative impact on local manufacturers.
The Buffalo Niagara Manufacturing Alliance and Manufacturing Association of the Southern Tier conducted two surveys last year of Western New York manufacturers on the impact of President Trump’s tariffs that were first implemented in April. The members surveyed come from Erie, Niagara, Chautauqua, and Cattaraugus counties.
“While some indicators show marginal improvement since August, the data make clear that tariffs continue to constrain growth, disrupt supply chains, and dampen hiring across the region’s manufacturing sector,” states a release showing the results of the December survey.
“It’s been very worrying,” said Peter Ahrens, BNMA executive director. “When we talk to members and manufacturers, tariffs are always one of the topics discussed.”
After President Trump first unveiled his tariffs on “liberation day,” Ahrens knew they would be harmful to area manufacturers due to supply chain issues. Decades of offshoring manufacturing in Asia and a lack of access to rare earth minerals hurt the country’s manufacturing capabilities.
“We aren’t prepared to say we’re going to have supply chains because we don’t make anything here anymore,” Ahrens said. He mentioned how manufacturers that planned to buy new million-dollar machines from foreign countries had to delay or pause their purchases because of the tariffs.
The first survey, done in August, found that these tariffs had already caused meaningful impacts in their first four months. The second survey, this past December, found the overall situation getting worse for manufacturers.
Ahrens said that of the two organizations’ members contacted, they received 59 responses, or 26%.
About 35% of manufacturers indicated they were reducing hiring, an 18.9% increase from August, while only 14% planned to hire more workers, still double from the August survey. Ahrens said that 23% of respondents were postponing capital expenditure projects, in part because those would require new employees to man.
As for who would be paying for the tariffs, 44% of manufacturers said all those costs would be passed on to customers. Many also identified Jan. 1 as a transition point from sharing the costs to fully passing them through to customers.
“That can depend on long-term contracts,” Ahrens said, noting that it can limit what some manufacturers charge for their products.
Overall, 65% of responding manufacturers said the tariffs had a negative impact on their business, with 30% saying they were very negative. 17.3% reported positive impacts due to new business gained from tariff-driven market shifts.
Ahrens said he only knew of one member whose business had benefited.
More than 80% reported higher raw material costs and over a third experienced supply chain breakdowns, including losses of key suppliers and international partners.
Ahrens said he has hope that Congress gets involved with the tariff issue.
“At some point, it has to hit those in Congress and the Senate that if the pain keeps up, they’ll have a hard time getting re-elected,” Ahrens said.