On April 2 President Trump issued new economic policies based on tariffs.
MH&L will track reactions to these tariffs.
National Association of Manufacturers
President and CEO Jay Timmons released the following statement:
“Needless to say, today’s announcement was complicated, and manufacturers are scrambling to determine the exact implications for their operations. The stakes for manufacturers could not be higher. Many manufacturers in the United States already operate with thin margins. The high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.
“Manufacturers build things in America to sell around the world—and manufacturers in America share President Trump’s goal of supporting manufacturing investment, growth and expansion here at home. The president has the opportunity to achieve this vital goal while also minimizing disruptions and cost increases across our industry. To empower manufacturers to drive the U.S. economy, the administration should:
- minimize tariff costs for manufacturers that are investing and expanding in the U.S.;
- ensure tariff-free access to critical inputs that manufacturers use to make things in America; and
- secure better terms for manufacturers by negotiating ‘zero-for-zero’ tariffs for American-made products in our trading partners’ markets—that means they don’t charge us, and we don’t charge them.
“A clear, strategic approach to trade must be part of a comprehensive manufacturing strategy that starts with an urgent appeal to Congress to make the 2017 tax reforms permanent. When these tax cuts were signed into law, it was rocket fuel for manufacturing in America and made the U.S. economy more competitive on a global scale. Manufacturers will work with the Trump administration and Congress to advance policies that help manufacturers grow and thrive—because when manufacturing wins, America wins.”
Background: In March, the NAM released its Q1 2025 Manufacturers’ Outlook Survey, highlighting rising concerns within the industry over trade uncertainties and increasing raw material costs. Trade uncertainties surged to the top of manufacturers’ challenges, cited by 76.2% of respondents—up 20 percentage points from the last quarter of 2024 and 40 points from the third quarter. Increased raw material costs were the second most cited concern, noted by 62.3% of respondents. These trade-related pressures contributed to a slight dip in overall optimism for their companies in the first quarter of 2025, down modestly from 70.9% in the fourth quarter to 69.7%.
According to another recent NAM survey of its members regarding the impact of tariffs on manufacturers, 87% of small and medium-sized manufacturers indicated that they may need to raise prices, and one-third could slow hiring.
Reuters Offers International Take
The news agency gathered reactions from companies and associations. Here are a few.
European Retail Industry Body EuroCommerce
"EuroCommerce calls on EU and U.S. administrations to engage in constructive dialogue. If negotiations fail, the EU has a legal basis to respond to unfair trading practices by third countries. With the anti-coercion instrument, the EU has an extensive toolbox which could help address the situation."
International Apparel Federation
"The U.S. government's announcement of heavy taxes on its trade with the rest of the world is a major shock to our global apparel industry. It unnecessarily creates a new and often irrational reality affecting billions of dollars of investments and the lives of tens of millions of people working in our industry globally. Ultimately, someone will have to pay the price."
Canadian Steel Association
"To reduce our dependency, the Canadian steel industry urgently requires the adoption of strict border measures that address unfair steel trade in Canada and helps to recapture the Canadian market for our industry, our workers and our communities."
German Exporters Association BGA
"We will have to pass these tariffs on as price increases, and that will hit turnover in many cases ... This is an economic blind alley at whose end lie welfare losses for both sides of the Atlantic."
Nationwide's Economic Analysis
Nationwide Chief Economist Kathy Bostjancic offers the following analysis:
“The Trump Administration’s tariff announcement was larger and more complex than we and most expected. With our first cut of the estimated impact, we revise down our real GDP growth estimate to a range of zero –0.5% Q4/Q4 2025 (previously we forecast 1% – 1.5% growth, while significant retaliation by our trading partners could tip GDP growth negative and result in a recession. This is a very fluid situation with actions and counter actions between the US and our trading partners that we will monitor closely.”
President Trump unveiled a universal minimum tariff increase of 10% for all trading partners and for 60 countries identified by the White House as the “worst offenders,” which will face substantially higher reciprocal rates.
The Asian Pacific countries bear the largest brunt, with tariffs against Cambodia topping the chart at 49%, Vietnam at 46% and China’s tariff rate lifted by 34 percentage points, on top of the 20-percentage point increase in the past few months, bringing the total tariff level to over 60%.
The 10% universal tariff and increase in China’s tariff rate to over 60% is line with President Trump’s campaign promise.
Canada and Mexico were excluded from this round of tariff increases, but they still face 25% tariff increases on non-USMCA compliant goods including autos and potentially tariffs on lumber soon.
There is still substantial uncertainty of what the eventual import tariff rates will be and how long they will remain in place. For now, we assume that negotiations with trading partners will lead to lower “reciprocal” rates than announced, but the minimum 10% universal portion could largely stick.
With our first cut of the estimated impact, we revise down our real GDP growth estimate to a range of zero –0.5% Q4/Q4 2025 (previously we forecast 1% – 1.5% growth, while significant retaliation by our trading partners could tip GDP growth negative and result in a recession. This is a very fluid situation with actions and counter actions between the US and our trading partners that we will monitor closely.
Our modeling work indicates that CPI inflation rate could be lifted to 3.5% - 4%, with a risk of a higher range of 4% - 4.5% depending on how negotiations unfold and the prospect of additional sector tariffs on goods such as lumber, semi-conductors, copper and pharmaceuticals.
For now, we maintain our view the Fed only cuts rates once in Q4 2025 as the acceleration in inflation in the coming months makes them hesitant to cut rates to support the slowing economy. However, if the economy falls harder into a recession, then the Fed might decide to look through “transitory” inflation rise and cut rates more – currently the bond market is pricing in three 25-basis point rate cuts, with 50% odds of another twenty-five basis points.
