US companies blame mercurial trade policies for blurring future business outlook: WSJ

WASHINGTON -- US businesses are warning that the constantly shifting trade policies of the US government are interfering with their ability to plan for the future, leading to hiring and investment freezes, The Wall Street Journal has reported.

John Starr, the owner of UltraSource, an importer and manufacturer of meat-processing technology in Kansas City, Missouri, was quoted as saying that he is hunkering down with no hirings and no more capital spending until he has clarity on tariffs.

The report said the company is waiting for suppliers in Europe to finish work on orders worth $20 million, which it placed before 10 percent tariffs imposed by the Trump administration took effect on April 9. That means it faces a $2 million levy if tariffs stay at that level.

"How am I supposed to pay this?" said Starr, a third-generation owner of the company. "That could wipe out profits for a year."

For months, US President Donald Trump has been announcing one large tariff increase after another, at times wavering from escalation to temporary resolution.

"Where this goes all depends on what Trump decides to do next, and candidly, even Trump doesn't know what Trump will do next," the report cited Christopher Thornberg, founding partner at Beacon Economics in Los Angeles, as saying. "So it's almost impossible to see where this thing is heading."

Under such circumstances, the US economy faces three major risks in the coming months, namely the potential rise of the unemployment rate, shrinking consumer demands, and disruptions caused by financial-market shocks or abrupt sentiment changes, said the report.

As the possibility of companies laying off workers due to slow demand remains, joblessness can quickly jump once such a scenario becomes reality, it said.

In the meantime, delinquency rates on consumer debt have been on the rise for a year, raising fears that deteriorating finances of low-income borrowers could lead to a more pronounced slowdown in consumer spending, the report added.

For many companies, the uncertainty triggered by Trump's sudden and seemingly arbitrary announcements of tariffs has upended the outlook for sales this year, said the report.

"I have to take action now," Starr said. "We're going to be very careful about any cash expenditure just because we need that cash to pay the tariff."