Manufacturing and tariffs
21 May 2025
I recommend this article, “Why aren't Americans filling the manufacturing jobs we already have?”
President Trump has been upending the global economy in the name of bringing manufacturing back. President Joe Biden signed into law massive investments aimed at doing something similar. The American manufacturing sector is reviving after decades of decay.
But there's something a bit weird undercutting this movement to reshore factory jobs: American manufacturers say they are struggling to fill the jobs they already have.
According to data from the Bureau of Labor Statistics, there are nearly half a million open manufacturing jobs right now.
Last year, the Manufacturing Institute, a nonprofit aimed at developing America's manufacturing workforce, and Deloitte, a consultancy firm, surveyed more than 200 manufacturing companies. More than 65% of the firms said recruiting and retaining workers was their No. 1 business challenge.
It's also worth addressing a common misconception: that tariffs, particularly those imposed by Trump, will significantly boost U.S. manufacturing. This belief is misguided. While tariffs might temporarily incentivize companies to shift some production capacity back to the U.S., large scale investments, such as building new factories, require long-term stability and predictability.
Unfortunately, Trump’s erratic policy shifts, especially regarding tariffs, offer no such certainty. His tendency to reverse course unpredictably makes it unlikely that any rational CEO would invest tens of millions of dollars in reshoring under his leadership. Some companies might signal interest publicly to appease him, but behind the scenes, they are almost certainly skeptical of his follow through. After all, as many have noted, Trump’s business acumen is questionable at best.
Moreover, even if factories return, staffing them will be a serious challenge. As noted earlier, manufacturers already struggle to hire. Trump’s anti-immigration policies exacerbate this problem by limiting access to a labor pool that often fills these roles. Without major improvements in working conditions or compensation, these jobs may remain unattractive to many Americans.
The result of tariffs is what most economists predict: prices will rise, economic growth will decrease and unemployment will increase.
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