Trade Blamed as Manufacturers Plan 2020 Spending Cuts, Fed Says
(Bloomberg) -- One in six companies in the Philadelphia region plans to reduce capital spending next year because of President Donald Trump’s trade policies, a Federal Reserve survey showed Thursday.
The results showed 17.5% of respondents blamed their planned investment cuts next year on tariffs and other trade policies, 54.4% said they expect no change in spending and 14.1% said they’ll increase it as a result. The breakdown came in response to a special question as part of the Philadelphia Fed’s monthly questionnaire of manufacturers in the bank’s district.
More broadly, the report showed manufacturing across the Philadelphia Fed’s district continued to grow, but at a slower pace, and “future activity indexes remained positive, suggesting continued optimism about growth for the next six months.”
The U.S.-China trade war helped push the American manufacturing sector into a recession in the first half, boosted calls for the Federal Reserve to cut interest rates and raised pressure on Trump to reach a deal with China that leads to a rollback in tariffs.
Speaking Thursday on CNBC, White House economic adviser Larry Kudlow blamed some of the domestic economic weakness on an autoworkers’ strike at General Motors Co. and on Europe’s sluggish growth.
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