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New data reveals that companies are increasingly passing on the costs of tariffs to consumers, despite President Donald Trump's urging not to. Findings from the New York Federal Reserve highlight that a significant number of businesses are transferring the financial burden resulting from increased tariffs onto their customers.

According to a recent survey from the New York Fed published on Wednesday, about 77% of service firms and 75% of manufacturers who faced higher costs due to U.S. tariffs have decided to pass at least some of these costs onto consumers. In fact, over 30% of manufacturers and roughly 45% of service firms reported transferring the entire tariff-related cost increase to their customers.

The speed at which prices increased following the new tariffs is striking. More than 35% of manufacturers and nearly 40% of service firms adjusted their prices within just a week of feeling the pinch from the tariffs, according to the New York Fed’s survey.

President Trump first announced in early April that he would impose "reciprocal" tariffs on more than 180 nations and territories, initially causing a significant dip in stock market performance. Though the President later paused these measures for three months, relieving the market somewhat, companies and investors now await the reinstatement of these tariffs by the July 9 deadline.

As businesses navigate the muddy waters of current trade policy, their executives weigh the need to increase prices against the risk of public and presidential scrutiny. Data from the Chief Executive Group and AlixPartners highlighted that nearly 90% of 300 surveyed CEOs in May admitted to raising prices or planning to do so. Around 70% of these leaders anticipated minimum price hikes of 2.5%.

Executives have been particularly cautious in how they address the impact of Trump’s trade policies to avoid direct confrontation. For instance, Trump publicly advised Walmart through social media to absorb the tariffs themselves, signaling that he would be monitoring the situation closely.

Survey results and anonymous comments further elucidate how American business leaders manage the contentious tariff situation. An unnamed respondent from the Institute for Supply Management (ISM) disclosed that tariffs have caused supply chain disruptions on par with those triggered by COVID-19. Another remarked on the chaotic environment's detrimental effects on pricing.

The uncertainty that tariffs inject into business decisions resonates across industries. In the ISM service sector survey, one participant highlighted challenges posed by unclear tariff duties, noting their strategy of delaying purchases where possible as a short-term remedy.

This state of flux has prompted executives to invest considerable effort into preparing contingency plans, often at the expense of strategic projects. "It is hugely distracting," commented one respondent, "and very hard to know which plans to actually implement."

The data underscores a complex scenario where businesses strive to balance financial viability and consumer pricing against an unpredictable backdrop of evolving trade policies.