The Federal Reserve’s economic vibe check shows businesses are spooked by tariffs

The Federal Reserve’s economic vibe check, also known as the Beige Book, painted a picture of business and community organizations rattled by uncertainty over President Trump’s chaotic tariff policies.

The most recent edition, released Wednesday, spanned most of March and April. During that short time, the Trump administration has flip-flopped on its tariff policy many times, and according to businesses surveyed by the central bank’s 24 branches, the pain has already started to be felt.

The report mentioned tariffs and uncertainty 105 and 80 times, respectively, the most since it started being collected in 1970, an analysis from Bespoke Investment Group’s George Pearkes found. References to “cuts” and “layoffs” are also rising to levels that have coincided with either recessions or serious growth scares, like the shale bust or high-inflation episode that followed the pandemic.

Notably, many of the businesses reportedly feeling the crunch are manufacturers, which the administration has proclaimed would benefit from tariffs but so far are seeing rising costs that they hope to be able to pass along to their customers. Many companies also reported adopting a “wait-and-see” approach to hiring and more are now considering layoffs. Meanwhile, community organizations like food banks are grappling with increased demand coupled with cuts in federal grants and subsidies. Some highlights:

“Port contacts were particularly concerned about the proposed port call tax on Chinese vessels which, by their estimates, could quadruple cargo handling costs. Some ports received multi-million-dollar tariff bills on Chinese cranes that were already ordered and enroute as tariffs were enacted and are now subject to the tariff. Rail saw record volumes this period with high storage levels; contacts attributed the extra cargo to tariff front-loading and extended gate hours to accommodate the extra freight.” — Richmond Fed

“Firms broadly expressed trepidation about the effect of tariffs on demand and costs, with some contacts indicating they will not be able to pass on the increases to clients.” — Dallas Fed

“A manufacturer reported that what initially looked to be a mild impact had worsened and was forcing them to evaluate sourcing options.” — St. Louis Fed

“Many firms raised prices amid higher costs resulting from tariffed inputs, and even some firms not directly impacted cited tariffs and less foreign competition as a trigger for price increases.” — Atlanta Fed