A new report offers fresh evidence that Trump's trade-war tariffs are hurting the US - even though he says they're not

• President Trump has long said that China is far more affected by the tariffs he's imposed than the US.
• Industry watchers have voiced disagreement, saying US consumers and companies are taking large hits as well.
• An August study from the New York Federal Reserve showed that tariffs and trade policies are seen pushing up prices and reducing profits for manufacturing and service businesses in the tri-state area.
• Read more on Markets Insider.

President Donald Trump said Friday that "the longer the trade war goes on, the weaker China gets and the stronger we get."

But a new report published Friday from the New York Federal Reserve shows that may not be the case for businesses in New York, northern New Jersey, and southwestern Connecticut.

In the supplemental questions to the Empire State Manufacturing and Business Leaders Survey, more manufacturers and business leaders said that tariffs and trade-war policy have pushed up prices and reduced profits compared to 12 months ago.

"The data illustrate a considerably more widespread effect of higher input costs among service firms than in last year's survey," the NY Fed wrote in the report. This is an issue because it can weigh on profits, be passed along to the consumer, or both.

President Trump has long said that China is paying the price for the increased tariffs, and that they're not hurting US consumers, workers, companies. But economists and analysts disagree.

US consumers are paying more for products either imported from China or made with parts imported from there. Meanwhile, companies have said they would have to raise prices, and that downward pressure on earnings could lead to serious declines in stock prices. Some corporations are also hiring less amid escalating trade tensions, hurting US workers.

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According to the survey, 79% of manufacturers and 60% of service firms said that recent increases in tariffs have raised input costs at least slightly. An additional 14% of manufacturers and 12% of service firms said that the increases were substantial. All numbers represented a marked increase from the August 2018 survey.

Going forward, the survey showed that businesses expect to pay higher prices for goods they purchase and expect that prices on goods they sell will also go up. Manufacturers and service firms expect that tariffs and trade policies will continue to have a negative impact of just under 40% for both 2019 and 2020.

Further, data Friday showed that while US consumer confidence is generally healthy, it is also showing signs of deteriorating. That was according to the University of Michigan's consumer-sentiment index, which posted a larger drop than expected, falling to its second-lowest level of Trump's presidency.

The underlying reason why is the elephant in the room Trump and his administration are reluctant to acknowledge: a possible economic recession.

"Consumers concluded, following the Fed's lead, that they may need to reduce spending in anticipation of a potential recession," Richard Curtin, the chief economist of the Michigan survey, said in a statement.