U.S. Manufacturing Is in Retreat: Why Trump’s Tariffs Haven’t Reversed the Slide

February 3, 2026 Javier Zelaya

2026年2月3日 | MB Daily News | Los Angeles CA

U.S. Manufacturing Is in Retreat—and Trump’s Tariffs Aren’t Helping

By MB Daily News Desk

U.S. manufacturing is in retreat. Jobs are slipping, and factory momentum remains fragile. Meanwhile, tariffs meant to revive the sector have added new costs for many firms. As a result, some companies face tougher decisions on pricing, sourcing, and investment.

Quick Summary

Manufacturing employment is down by 200,000+ jobs since 2023.
Factory activity stayed in contraction for 26 straight months through December.
Tariffs have raised input costs and increased uncertainty, which can delay investment.

1) Jobs: A slow grind lower

Hiring has not matched the “golden age” message. Instead, payrolls have continued to soften. For example, federal figures show job losses in each of the eight months after the latest tariff rollout. In total, more than 200,000 manufacturing roles have disappeared since 2023.

However, layoffs have not surged everywhere. That suggests a gradual pullback, not a single shock. Even so, the end result is fewer Americans in factory jobs than at any point since the pandemic recovery began.

Job losses since 2023 reinforce the headline: U.S. manufacturing is in retreat.

2) Output: A long stretch of weak factory activity

Factory surveys have also pointed to ongoing strain. The Institute for Supply Management’s index contracted for 26 consecutive months through December. Still, January showed a rebound in new orders and production that surprised some analysts.

Even so, one month does not make a trend. Therefore, many observers are watching for follow-through in the next releases.

A long contraction streak helps explain why confidence in a near-term boom remains limited.

3) Tariffs: Higher costs now, uncertain payoff later

Tariffs can reshape incentives over time. In addition, they can encourage some domestic substitution. However, many manufacturers still depend on imported inputs. When those inputs get taxed, costs rise fast.

As a result, companies often face three choices. They can raise prices. They can absorb costs. Or, they can scramble to find alternatives. Meanwhile, stop-and-start policy signals can freeze big decisions. Therefore, executives may delay expansions, equipment orders, and hiring.

In the short run, tariffs can raise costs and uncertainty. Consequently, investment often slows.

Case in point: steel, supply gaps, and “paying the tariff anyway”

Steel users can face a double bind. Tariffs can lift import prices. Yet domestic supply can be tight for certain grades. As a result, some firms still buy tariffed imports when U.S. supply runs short.

That dynamic can dilute the intended benefit. Moreover, it can create scheduling risk for projects. Therefore, companies may hold back on growth plans even when demand is steady.

What could change the picture?

Manufacturing turnarounds take time. Construction timelines can stretch for years. In addition, financing conditions matter. Lower rates could help, and clearer rules could help too.

Still, productivity gains can limit hiring. So, output can rise without a matching surge in jobs. That is another reason why U.S. manufacturing is in retreat remains a live concern for workers.

Key takeaways

U.S. manufacturing is in retreat, with 200,000+ roles lost since 2023.
Factory activity showed a long contraction streak, although recent data hinted at stabilization.
Tariffs have raised costs and uncertainty. As a result, some firms delay investment decisions.