Despite major policy initiatives, U.S. manufacturing has yet to show a clear resurgence. Under President Joe Biden, federal subsidies and tax credits aimed at chipmakers and electric vehicle producers led to a brief boom. Between April 2021 and October 2024, factory construction surged as incentives encouraged domestic investment, tripling capital spending in some sectors.
This wave of optimism, however, has been followed by stagnation. Since Donald Trump returned to the presidency, a shift in priorities has altered the landscape. His administration rolled back some clean-energy subsidies and reinstated tariffs on imported steel, aluminum, and vehicles. These changes were intended to protect U.S. producers but introduced uncertainty for businesses relying on global supply chains.
Manufacturers now find themselves caught between two policy regimes, subsidy-driven expansion and tariff-enforced protectionism, without sustained growth to show for either.
Employment And Output Remain Flat
Hiring data underscores the malaise. In June 2025, factory employment declined by 7,000 jobs, following a similar drop in May. According to Bureau of Labor Statistics data, the total number of manufacturing jobs now stands at 12.75 million, nearly identical to February 2020, just before the pandemic took hold.
Output has also struggled to gain traction. The Institute for Supply Management reports that manufacturing activity has contracted in 30 of the last 32 months. Though not plunging into full recession, the industry appears frozen.
Industry veteran Eric Hagopian, owner of a precision tool firm in Massachusetts, summed up the sentiment:
“We didn’t get destroyed… but we’ve been in this stagnant, sort of stationary environment.”
After robust hiring in 2021 and 2022, the pace slowed in 2023, and has since remained flat. The short-lived momentum from pandemic recovery and federal stimulus has faded, with few signs of resurgence.
Tariffs Create Mixed Outcomes
While tariffs have helped some domestic producers, they’ve also raised costs for others. Waukesha Metal Products, a Wisconsin-based manufacturer, recently secured a contract in Texas, aided by a 25 % tariff that leveled the playing field against lower-cost foreign bids.
Yet for companies dependent on imported inputs, tariffs have become a cost burden. U.S.-produced steel currently averages $960 per ton, compared to a global benchmark of $440. This cost gap persists despite import duties, pushing many manufacturers to seek cheaper foreign alternatives regardless of penalties.
The Trump administration’s shifting schedules for tariff implementation have only worsened confusion. Some new duties were announced for July 9, only to be delayed to August 1, leaving businesses unable to plan with confidence.
Procurement managers across sectors have voiced frustration in recent ISM surveys:
“Customers do not want to make commitments in the wake of massive tariff uncertainty.”
“Tariffs continue to cause confusion and uncertainty for long-term procurement decisions.”
Instead of encouraging expansion, the policy environment appears to be discouraging risk-taking.
Growth Forecasts Turn Cautious
Though some analysts believe the sector is simply normalizing after a volatile post-pandemic cycle, others warn of deeper issues. After the initial COVID crash, the industry rebounded quickly. In 2021, factories added 379,000 jobs, followed by 357,000 in 2022. Since then, growth has essentially flatlined.
Mark Zandi, chief economist at Moody’s Analytics, sees troubling signs:
“Manufacturing employment is likely to keep sliding, and the sector could enter a recession in the next year if production stays flat.”
New legislative efforts, such as Trump’s proposed “One Big Beautiful Bill” aimed at reviving industrial tax incentives, may alter the outlook. But without clarity on future policy, firms are holding back.
Ned Hill, an industrial policy expert from Ohio State University, notes:
“There’s a hesitancy to hire people just to lay them off in the near future.”
Companies remain wary, choosing to delay expansion or hiring until they better understand what “normal” looks like under the current administration.