“President Trump has claimed that his sweeping tariff regime will reshore American companies and revive manufacturing in the U.S.
So far, that hasn't happened. Economic activity tied to manufacturing has shrunk for most of Trump's second term.
A few investments and pledges aimed at beefing up domestic manufacturing appear timed to appease the president, and may or may not come to fruition. The latest is from Apple, which is planning to commit an additional $100 billion to the U.S., after saying in February it would spend more than $500 billion in the country over four years to make servers and parts for its key products.
Beneath the shiny announcements lies a sector that can't seem to get off the ground.
From March to July, U.S. manufacturing activity contracted, according to the Institute for Supply Management's monthly survey. Manufacturing PMI last registered at 48, below the 50 score that differentiates growth and decline.
The effective average tariff rate on all imported goods now stands at around roughly 18%, from 2.3% last year. Those are the highest levels since the 1930s.
Still, some economists say Trump's tariffs, set to take broader effect on Thursday, aren't high enough to bring companies back. Major U.S. trade partners like South Korea, the European Union and Japan for example, all face 15% tariffs, below the 25% to 30% levels the president once threatened.
Tariff levels may be high enough to bring back production of some textiles, but probably not enough to encourage additional production of cars and steel in a significant way, said William Reinsch, senior adviser at the Center for Strategic and International Studies.
"The obvious candidates are sectors where labor is proportionally a smaller cost of production and where input materials are available domestically or from nearby sources," he said.
He and others say the unpredictability of Trump's trade wars still makes it impossible for companies to decide on big capital commitments, like moving a factory from Asia to the U.S. Trump surprised investors on Wednesday by saying he'd soon double tariffs on India to 50%. Tariff levels on China and Mexico have been in flux since the start of the year, and seem far from settled.
Other factors have hurt the sector too. Take Whirlpool, which domestically produces about 80% of its large appliances sold in the U.S. The company says its plants have made fewer products this year as its Asian competitors accelerated shipments to the U.S. to get ahead of an expected jump in tariffs. The company, whose business has also been hurt by slumping home sales, hopes its U.S. factory base will give it an advantage over its rivals as tariffs take hold in the second half of the year.
Motorcycle maker Harley-Davidson and off-road vehicle manufacturer Polaris, both of which have extensive U.S. factory operations, cited consumer uncertainty as a factor behind decisions to tamp down production.
"Consumers are really just reluctant to go spend right now unless they really need to or they're fortunate enough to have the financial flexibility to do that," Polaris CEO Mike Speetzen said during the company's July earnings call.
Manufacturers may not be laying off big swaths of their workforce but are taking a cautious approach to hiring. Last week's weaker-than-expected jobs report showed downward revisions for manufacturing in particular.
The sector lost a total of about 26,000 jobs in May and June, and another preliminary estimate of 11,000 jobs in July.
Even if some firms reshore production, how fast that can be achieved is in question. Manufacturers may struggle to find the American workers they need and new facilities might face higher prices for steel, copper and aluminum, all of which Trump has tariffed.
Oliver Allen, U.S. economist at Pantheon Macroeconomics, compares U.S. manufacturing to a person who hasn't gone to the gym for 30 years. "Getting him to bench press 100 pounds is going to be quite difficult," he said.
The White House touts nearly $2 trillion of manufacturing-related projects announced since the start of the year. Nearly 80 projects are included in the tally, from factories to data centers to a liquefied natural gas facility.
But those projects could take years to materialize. From finding and deciding on a site for expansion, to establishing a domestic supply chain, "you're talking years out, not months or quarters," said Mike Reid, U.S. economist at RBC Capital Markets.
Many larger-scale domestic manufacturers rely on global supply chains to source steel, copper, aluminum and other components. So while high tariffs might give domestic manufacturers an advantage, they will likely boost U.S. companies' production costs as well.
Tom Derry, ISM's CEO, says Trump's tariffs are already weighing on manufacturers that can't pass on the additional cost to their buyers, or U.S. consumers.” [1]
1. U.S. News: U.S. Manufacturing Struggles to Regain Steam. Deng, Chao; Keilman, John. Wall Street Journal, Eastern edition; New York, N.Y.. 07 Aug 2025: A2.
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