A looming battle in Washington over raising the U.S. debt ceiling could pose a threat to global financial stability and midsize companies alike, warns the latest “Real Economy” report from RSM.
“After the recent failure of the Senate to arrive at a compromise on health care reform, middle market businesses that have revenue exposure to the federal government should be aware of the risks of a disruption,” writes Joe Brusuelas, chief economist for the audit, tax and advisory firm.
Midsize companies also are looking to policymakers for a decision on potential steel tariffs, a level of protectionism that could lead to higher prices.
The White House in April launched an investigation to determine whether steel imports present a national security risk. An affirmative finding could lead to tariffs that would slow U.S. economic growth and lead to higher prices as foreign trading partners retaliate.
The report notes that middle-market businesses most likely affected include those with exposure to “downstream industries, such as fabricated metal products, electrical equipment, appliances and components, machinery, transportation equipment and furniture and related products.”
For more insights from Joe Brusuelas, listen to the playback of his recent Middle Market Growth Conversation.
Kathryn Mulligan is the associate editor of Middle Market Growth.