Manufacturers are delaying employment amid increasing uncertainty about tariffs and consumer spending.
Revealed: Meaning “made in America”
George and Lisa Winton of Swanney, Georgia, discuss the foundations of the Winton Machine Company and the meaning of “made in America.”
US manufacturing abandoned more workers in August despite policies from President Donald Trump’s administration that aimed to strengthen the sector.
According to the Federal Bureau of Labor Statistics, the US lost 12,000 manufacturing jobs this month, continuing its downward trend since its recent peak in February 2023. Overall, employers added a disappointing 22,000 jobs in August, indicating a slower US employment.
It takes time to see how tariffs affect the manufacturing workforce. So far this year, new trade policies and uncertainty around consumer spending has led some companies to delay employment.
“There is no good reason for manufacturing to hire now, and there are many good reasons for taking that easily,” said Ron Hetrick, senior economist at LightCast, labor market analytics firm.
Why is manufacturing losing workers?
The Trump administration isn’t the only company in manufacturing job losses. Employment in the industry, which slipped into 12.7 million people in August, or about 8% of total agricultural employment, has been drastically immersed since its peak in 1979, when it accounted for around 22% of total employment. Although there were profits that were earned after the Great Recession, work began to flow again in early 2023.
According to the Bureau of Labor Statistics, this downward trend continued until 2025, losing about 78,000 jobs per year by August.
Economists point to the continued long-term trend driven by increased production between manufacturing facilities.
Chad Siverson, professor of economics at the University of Chicago, said:
Higher interest rates intended to ease inflation by cooling economic activity also play a role, Hetrick said.
Recently, changes under the Trump administration appear to fuel the fire. Immigration crackdowns mean that there are fewer workers in factory payroll calculations. Decreased consumer confidence has led manufacturers to question production plans. And the uncertainty about Trump’s new trade policy has suspended employment for some companies until they get a better picture of how tariffs will affect pricing.
“I know there’s nothing that cuts investment like a lot of uncertainty, especially with regard to policy,” Syverson says. “And to say that there has been uncertainty in policy over the past few months is an understatement.”
A recent report from the Supply Management Institute, a trade group, discovered economic activity in the manufacturing sector, which was contracted for the sixth month in a row in August.
One survey respondent cited in the report working in the electrical equipment, appliances and components space said their company should raise 24% to offset tariffs and let go of around 15% of the US workforce, including the role of engineering and IT.
“‘Made in the Usa’ is even more difficult due to tariffs on many factors,” the respondent said. “The administration wants manufacturing jobs in the US, but we are losing our more highly skilled, highly paid roles. Capital expenditures and employment are frozen due to the lack of trade and economic stability. That’s survival.”
Will tariffs boost manufacturing jobs?
Manufacturing growth depends on the number of companies that decide to move production to the US.
The White House website claims that more than $8 trillion in new investments from companies like Apple and Nvidia “creating hundreds of thousands of new paying jobs for Americans,” but some of these investments were in work before Trump took office, as previously reported by USA Today.
But even the average effective tariff rate of 17.4% is the highest since 1935, according to Yale’s budget lab – some experts say it might not be enough to bring manufacturers back to the US in a meaningful way.
A report led by Wells Fargo senior economist Sarah House said it would require at least $2.9 trillion in net new capital investment to add 6.7 million manufacturing jobs and bring the sector back to its historic peak. That’s almost twice the $1.6 trillion secured by the Trump administration in late May, when the report was released.
“Even with current tariff policies stuck, full rebound in manufacturing employment looks difficult,” the report reads.
According to a 2022 Commerce report, tariffs are increasing production costs for US manufacturers. This narrows down the business’s budget and makes employment even more difficult.
“Making input more expensive for businesses requires prices to go up, and when prices rise, people buy less.
One respondent to the ISM survey, which works with the manufacture of computer and electronic products, said higher material costs have made it “more difficult” to justify plans to return production to the US.
“Taxes continue to cause chaos in planning/scheduling activities,” respondents said in the report. “As unexpected increase in tariffs is announced, new product development costs continue to rise.”
Even if a company decides to re-shore production, it could take years to build a new facility. They can also face difficulties finding qualified workers.
However, the ISM report also had positive sector signals. Raw material prices growth slowed in August compared to July, with the new order index expanding for the first time after six months of contraction. ISM Chair Susan Spence said, “There were 2.5 comments expressing concerns about short-term demand for all positive comments about new orders.”
Scott Paul, chairman of the United Manufacturing Alliance, representing manufacturers and United Steelworkers, stressed that the sector is not a monolith.
Once uncertainty around trade has subsided, he hopes that other changes, such as tariffs, new tax policies, low interest rates, and labor training incentives, will be sufficient to trigger a revival of manufacturing employment.
“Taxes alone probably won’t move needles in every sector as we would like. But tariffs combined with additional industrial policies can have a huge impact on manufacturing,” Paul said.
