ICYMI: Trump’s Promised Manufacturing Boom is a Big Bust

On “Liberation Day,” Trump’s Chaotic Economy is Already Failing American Manufacturers

As President Trump prepares for his so-called “Liberation Day” announcement today, he’s claiming that his chaotic tariff policies will bring a “manufacturing boom” to the United States. But if history is any indication, the reality will be far different. After the investment in construction of manufacturing facilities fell in his first term, it skyrocketed over the last four years and has stalled since his return to the White House.

Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez shared the following statement on the impact Trump’s chaotic economic policymaking is having on the manufacturing industry and beyond:

“President Trump will attempt to make up his mind on trade policy today, but the chaos of his approach is already taking a toll on the U.S. economy. Consumer confidence has crashed, small business uncertainty is near an all-time high, and manufacturers are pulling back on investments. He isn’t ushering in a manufacturing boom – he’s putting us on a collision course toward a recession.”

A slew of recent manufacturing data shows that Trump’s chaotic approach to the economy is a major liability for manufacturers.

• Trump’s promised manufacturing boom hasn’t just failed to materialize – the sector as a whole is weakening.
  • Factory activity in New York State, as measured by the New York Fed’s Manufacturing Index, saw its largest decline in nearly two years.
  • The Philadelphia Fed’s Manufacturing Survey showed that manufacturers in the region are now expecting less business and higher prices, and the 6-month outlook for new orders had its third-largest decline ever.
  • The Texas Manufacturing Outlook Survey from the Dallas Fed found general business activity at its lowest level in eight months. Businesses in Texas blamed “radical and erratic changes in U.S. government policies,” warning, “this will not be an easy transition.”
  • The Federal Reserve Board Beige Book revealed flat manufacturing activity, weakening demand, and increased uncertainty due to tariffs that could raise prices and disrupt supply chains in the Midwest and Mid-Atlantic regions.
  • The S&P Global US Manufacturing PMI had the weakest expansion of the year so far. Additionally, input price inflation rose to its highest level in over two-and-a-half years. Sentiment about prospects over the coming year fell to the second-lowest level since 2022.
  • Yesterday’s Manufacturing Institute for Supply Management Report on Business showed slowing activity, slowing hiring, slowing sales, and rising prices. Across various industries, manufacturers are pointing the finger at President Trump’s erratic economic actions for the issues they’re facing.
  • The National Association of Manufacturers’ Outlook Survey showed a decrease in positive outlook among manufacturers, broad-based concerns over trade uncertainties and rising input costs, and slowing capital investments in the first quarter of this year.
• After the construction industry experienced a historic boom over the last four years, the sector is now expected to have modest gains, if any this year, due to concerns over increased material costs due to Trump’s economic agenda.
• Despite the historical success of the bipartisan CHIPS Act in boosting the semiconductor manufacturer sector, Trump wants to repeal it. During his address to Congress, Trump said, “You should get rid of the CHIP Act and whatever’s left over.”
• Trump has also withheld funding from the Inflation Reduction Act and vowed to repeal it, which prompted even some congressional Republicans to urge him to preserve it, claiming the IRA credits are important “To meet President Trump’s campaign promises of bringing back manufacturing.”
• Layoffs are hitting the manufacturing sector as well:
  • Steelmaker Cleveland-Cliffs laid off 1,200 employees in the Midwest due to the impact of tariffs.
  • Whirlpool announced 650 layoffs at an Iowa manufacturing plant due to declines in consumer demand as consumer sentiment tanks and consumer uncertainty rises.
  • A slate of other manufacturers, such as Milgard Manufacturing, Wolfspeed, and SPS Technologies, are laying off workers and closing factories.

• CEOs across industries are concerned with Trump’s economic agenda. According to the latest “What CEOs Talked About” report, mentions of the keyword “tariff” during earnings calls jumped 190%, while mentions of “uncertainty” climbed 49%, and hiring freeze mentions skyrocketed 286%.
  • “It’s very hard to make an investment decision, even on something like a restart, without knowing how long the tariffs will last”  – Alcoa CEO Bill Oplinger, on restarting shuttered U.S. manufacturing facilities.
  • “As much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where on top of that, we’re spending billions of capital, billions of dollars in capital, and then it ends, right. So we can’t be whipsawing the business back and forth” – General Motors CFO Paul Jacobson, on reallocating plants due to tariffs.
  • “Putting tariffs on our trading partners, our closest trading partners, including Canada and Mexico, just is going to raise prices for our own domestic manufacturers and not solve the problem.” –  Mitchell Metal Products President and Owner, Tim Zimmerman.