Positive sentiment has cooled for the first time since GTIA began tracking the channel’s opinions on the economy and tariffs in May, dropping an average of 10 percentage points across respondents that describe the current situation in an optimistic light.
In August, the percentage of channel firms that rated the overall U.S. economy as strong came in at 39%, a drop from nearly half (48%) that said so in July. Also in August, the percentage of ITSPs that viewed the state of the overall economy negatively increased to 40% from 31% the month prior. The remainder took a neutral stance.
The shifts in sentiment could indicate that the real-world impact of tariffs is starting to be felt locally, with ITSPs experiencing how the current administration’s levies on foreign goods affect their own supply chain, cost of goods, and customer spending. Likewise, many business owners continue to be skittish about the economy in general, worried about interest rates, stubborn inflation, and a lingering sense that a recession could ensue.
The current mood is also reflected in ITSPs’ views for the next 12 months, with those expressing a positive outlook about economic performance declining from 54% in July to 43% in August. Notably when it comes to the administration’s tariff policy, the percentage of ITSPs that said it has had a positive effect on their business dropped sharply month to month, from 50% in July to 38% in August.
What the months ahead hold is in question. A federal appeals court found early this month that many of the tariffs were issued illegally, upholding a decision made by a federal trade court. However, the court delayed implementation of its decision until mid-October so the administration can seek Supreme Court review, which leaves the tariffs in place until at least then.
GTIA Members: Read the August GTIA Channel Economic Tracker in the Member Portal.
