A quarterly drop in GDP from 3.1 percent to 2.1 percent illustrates the growing toll that President Donald Trump’s trade policies are taking on American businesses, economists say.

American consumers proved themselves willing and able to spend in the second quarter, with a 4.3 percent increase in consumption offsetting a 5.5 percent slump in business investment.

“In the second quarter of 2019, we caught the first whiff of damage to the economy caused by Mr. Trump’s trade war,” said RSM chief economist Joseph Brusuelas, characterizing the issue as “an uncertainty tax” that has left corporate America guessing about the potential impact of tariffs on input costs and exports, supply chain disruption and market access.

According to July’s Business Conditions Survey conducted by the National Association for Business Economics, fewer than half of the respondents expect real GDP growth to increase by more than 2 percent over the next year, compared to two-thirds who expressed that view in January.

“On balance, panelists expect slower growth than they were expecting three months ago. After more than a year since the U.S. first imposed new tariffs on its trading partners in 2018, higher tariffs are disrupting business conditions,” Constance Hunter, NABE president and KPMG chief economist, said in the survey report.

In the second quarter, NABE survey respondents reported lower profit margins and, among goods-producing companies, higher input costs. More than three-quarters of respondents in that sectors said tariffs are having a negative impact on business.

In recent earnings calls, Brusuelas said, it was evident that executives are “growing increasingly concerned about the direction of trade,” which hurts investment in everything from factories to intellectual property.

“There’s no question that there was trade-related impact,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust. “For second-quarter earnings reporting, one of the things that’s mentioned a fair amount is certainly trade and how that impacts capital spending.”

GDP also was propped up by rising government spending powered by burgeoning government debt. According to the Congressional Budget Office, the federal debt will rise to 144 percent of GDP by 2049, a level the agency called “unprecedented” in a recent report.

Economists warn that these high debt levels will drive up interest rates, making it more expensive for households, companies, and the government to service their respective debts and eating into funds that otherwise could be deployed for investment or consumption.

Anything that crimps consumer activity would be bad news for the current economy, because consumer spending driven by the strong jobs market did much of the heavy lifting in the second quarter.

Brusuelas said policymakers won’t be able to rely on the American consumer to fill in the shortfall in corporate spending indefinitely.

“The 4.3 percent is not sustainable. It was a function of pent-up demand following a very weak quarter,” he said. Overall, for the first half of the year, “You end up with a pace of consumption around 2.6 percent.”

More bad news: Brusuelas said that companies will be forced to pass along more tariff-related costs to shoppers, which could drive up prices and hurt demand in the critical second half of the year.

“This is going to hurt back-to-school spending season,” he predicted. Absent a trade resolution, he added, the full impact of tariffs on consumer prices could hit right around the holiday shopping season. “These things take about three to six months to pass through to consumers,” he said.