Associated Press Economics Writer Paul Wiseman
WASHINGTON (AP) – Democrats and Republicans don’t agree much, but they share the confidence that the government should support American manufacturers in some way.
Democratic President Joe Biden has handed out subsidies to chipmakers and electric car makers. Republican President Donald Trump has created import tax barriers around the US economy to protect domestic industries from foreign competition.
However, American manufacturing has remained a rut for almost three years. And it is still unclear whether the trend will reverse itself.
The U.S. Labor Bureau reports that American factories abandoned 7,000 jobs for the second consecutive month in June. Manufacturing employment has been steadily progressing for the third year in a row.
The Supply Management Institute, an association of purchasing managers, reported that manufacturing activities in the United States had been reduced in June for the fourth consecutive month. In fact, according to ISM, U.S. factories have declined for 30 months of the 32 months since October 2022.
“The past three years have been a real manufacturing slow,” said Eric Haggopian, CEO of Pilot Precision Products, a manufacturer of industrial cutting tools in South Deerfield, Massachusetts.
Major economic factors contributed to the slowdown. The surge in inflation arising from an unexpectedly strong economic recovery from Covid-19 has raised factory costs and prompted the Federal Reserve to be raised 11 times in 2022 and 2023.
Government policies were aimed at helping.
Biden’s tax system on semiconductor and clean energy production has led to a boom in factory construction – more than three times more investments in manufacturing facilities than April 2021 to October 2024. Anyway, anyway.
However, factory investments have declined as the incoming Trump administration launched a trade war and worked with Congress to end Biden’s subsidies for green energy. Now, Moody’s Analytics Chief Economist Mark Zandy predicts that “manufacturing production will continue to continue flatlines.”
“If production is flat, that suggests that manufacturing employment will continue to slide,” Zandi said. “Manufacturing is likely to suffer from a recession next year.”
Meanwhile, Trump is trying to protect US manufacturers by imposing tariffs on goods made overseas, and work with factories to move to America and produce them. He slapped 50% tax on steel and aluminum, 25% on auto parts and auto parts, and 10% on many other imports.
In some respects, Trump’s tariffs can give us an edge to the factory. Chris Zuzick, vice president of Waukesha Metal Products, said Wisconsin manufacturer Sussex faces tough competition for a big deal in Texas. Foreign companies offer much lower prices. But “When we throw tariffs, it brings us closer,” Zzik said. “It’s definitely a useful situation,” he said.
However, factories in the United States also import and use foreign products, such as machinery, chemicals, raw materials such as steel and aluminum. Taxing these inputs could raise costs and reduce US producers’ competitiveness in the global market.
Consider steel. Trump’s tariffs don’t just make imported steel more expensive. By putting foreign competition at a disadvantage, tariffs allow us steel makers to raise prices. According to Industry Monitor Steelbenchmarker, US-made steel was $960 per metric tonne as of June 23, more than twice the price of $440 per tonne.
In fact, because US steel prices are so high, pilot precision products continue to buy the necessary steel from Austrian and French suppliers, paying Trump’s tariffs.
Trump also created considerable uncertainty by repeatedly adjusting and rescheduling his tariffs. For example, just before the new import taxes were set to take effect on dozens of countries on July 9, the president pushed a deadline on August 1, allowing time to negotiate with US trading partners.
Flipflops was confused by the factories, suppliers and customers about where things were. The manufacturer has expressed a complaint in an investigation by ISM. “Customers don’t want to make a commitment in the wake of massive tariff uncertainty,” said the manufactured metal products company.
“Taxes continue to cause confusion and uncertainty in long-term sourcing decisions,” he added computer and electronics companies.
Some may argue that it’s not necessarily a bad thing for US manufacturing. They just returned to normal after a pandemic-related bust and boom.
The factory significantly cut jobs of nearly 1.4 million people in March and April 2020, with more businesses shutting down due to Covid-19, forcing Americans to stay home. Then something interesting happened. American consumers worked with community relief checks from the government to wash away and photographed manufactured items such as air fryers, patio furniture and exercise machines.
Suddenly, the factory was in a hurry to catch up. They brought back the laid-off workers. The factory added 379,000 jobs in 2021. This was the most since 1994, and then another 357,000 people were invited in 2022.
However, in 2023, factory employment halted growth and began backtracking as the economy returned to something close to pre-pandemic normal.
In the end, it was a wash. Last month’s factory salaries reached 12.75 million, and they were standing right before February 2020 (12.74 million) denounced the economy.
“It’s a long and weird trip back to where we started,” said Jared Bernstein, chairman of Biden’s White House Economic Advisory Council.
Zuzick of Waukesha Metal Products said it will take time to see if Trump’s tariffs will succeed in bringing the factory back to America.
“The fact is that manufacturing doesn’t stiffen,” he said. “It takes time to switch gears.”
Pilot Accuracy Hagopia hopes that the tax cuts on Trump’s one big beautiful bill will help American manufacturing regain momentum.
“At the end of the tunnel there may be some light that may not be a locomotive,” he said.
For now, manufacturers are likely to delay major decisions on investing or raising new workers until they see where Trump’s tariffs will settle and how they will affect the economy, said Ned Hill, professor emeritus of economic development at Ohio State University.
“There’s all this uncertainty about what the rest of the year will look like,” he said, “we can be hesitant to hire people just to fire them in the near future.”
“Everyone,” Zzik said with Waukesha metal products.
Original issue: July 14th, 2025, 7:35am EDT
