The U.S. manufacturing industry shed more workers in August despite policies from President Donald Trump’s administration aimed at bolstering the sector.

The United States lost 12,000 manufacturing jobs for the month, continuing a downward trend since its most recent peak in February 2023, according to the federal Bureau of Labor Statistics. Overall, employers added a disappointing 22,000 jobs in August, signaling a slowdown in U.S. hiring.

It will take time to see how tariffs’ impact on the manufacturing labor force plays out. So far this year, the uncertainty around the new trade policies and consumer spending has prompted some businesses to slow hirings.

“There's no good reason for manufacturing to be hiring right now, and there are a lot of good reasons for it to be taking it easy,” said Ron Hetrick, a senior economist at labor market analytics company Lightcast.

Why is the manufacturing sector losing workers?

Manufacturing job loss isn’t exclusive to the Trump administration. Jobs in the industry – which slid to 12.7 million in August, or about 8% of total nonfarm employment – have dipped dramatically since their peak in 1979 when they accounted for roughly 22% of total employment. While there were gains made after the Great Recession, jobs began trending down again in early 2023.

That downward trend has continued into 2025, with the sector losing roughly 78,000 jobs over the year through August, according to the Bureau of Labor Statistics.

Economists point to a continuation of long-term trends driven by increased production among manufacturing facilities.

"As you get better at making manufactured product – that is productivity growth – you don't need as many people to make the same things you did before," said Chad Syverson, an economics professor at the University of Chicago.

Higher interest rates, meant to ease inflation by cooling economic activity, also play a role, said Hetrick.

More recently, changes under the Trump administration seem to be adding fuel to the fire. A crackdown on immigration means fewer workers on factory payrolls. A decline in consumer confidence has manufacturers questioning production plans. And uncertainty around Trump’s new trade policy has some companies pausing hiring until they have a better picture of how tariffs will impact pricing.

“We know nothing reduces investment quite like a bunch of uncertainty, especially in regard to policy,” Syverson said. “And to say that we’ve had uncertainty in policy for the past several months is a massive understatement.”

A recent report from the Institute for Supply Management, a trade group, found economic activity in the manufacturing sector contracted for the sixth consecutive month in August.

One survey respondent quoted in the report, who works in the electrical equipment, appliances and components space, said their company has had to increase prices 24% to offset tariffs and let go about 15% of its U.S. workforce – including engineering and IT roles.

“‘Made in the USA’ has become even more difficult due to tariffs on many components,” the respondent said. “The administration wants manufacturing jobs in the U.S., but we are losing higher-skilled and higher-paying roles. With no stability in trade and economics, capital expenditures spending and hiring are frozen. It’s survival.”

Will tariffs boost manufacturing jobs?

Manufacturing job growth will hinge on just how many companies decide to shift production to the United States.

The White House website claims more than $8 trillion in new investments from companies like Apple and Nvidia are “creating hundreds of thousands of new, good-paying jobs for Americans,” although some of those investments were in the works before Trump took office, as previously reported by USA TODAY.

But even with the average effective tariff rate at 17.4% – its highest since 1935, according to the Yale Budget Lab – some experts say it may not be enough to bring manufacturers back to the United States in a meaningful way.

It would take at least $2.9 trillion in net new capital investment to add 6.7 million manufacturing jobs and return the sector to its historic peak, according to a report led by Wells Fargo senior economist Sarah House. That’s nearly double the $1.6 trillion secured by the Trump administration as of late May when the report was published.

“Even if current tariff policy sticks, a full rebound in manufacturing employment looks hard-pressed,” the report reads.

One issue is that tariffs drive up production costs for U.S. manufacturers, which import nearly one-third of intermediate inputs, according to a 2022 report from the Commerce Department. This squeezes firms’ budgets, making hiring more difficult.

"If you make the inputs more expensive for a firm, their prices are going to have to go up. And if their prices go up, people will buy less. And if people are buying less, you’re going to use less workers,” said Teresa Fort, an associate professor of business administration at Dartmouth who researches international trade.

One respondent to the ISM survey, who works with computer and electronic product manufacturing, said higher material costs have made it “more difficult” to justify plans to bring production back to the United States.

“Tariffs continue to wreak havoc on planning/scheduling activities,” the respondent said in the report. “New product development costs continue to increase as unexpected tariff increases are announced.”

Even if firms decide to reshore production, building out new facilities could take years. They could also face difficulties finding qualified workers.

But there were also positive signals for the sector in the ISM report. Raw materials price growth slowed in August compared to July, and the New Orders Index expanded for the first time after six months of contraction ‒ although ISM Chair Susan Spence noted in the report that "for every positive comment about new orders, there were 2.5 comments expressing concern about near-term demand."

Scott Paul, president of the Alliance for American Manufacturing, a trade group representing manufacturers and the United Steelworkers, emphasized that the sector is not a monolith – some manufacturers could take a hit from higher input costs, while others stand to benefit from tariffs.

Once the uncertainty around trade settles, he has hopes tariffs and other changes – including new tax policies, lower interest rates and workforce training incentives – will be enough to spark a manufacturing jobs revival.

“Tariffs alone aren’t likely to move the needle for every sector the way we want it to. But tariffs combined with additional industrial policies can be highly impactful for manufacturing," Paul said.

This article originally appeared on USA TODAY: The US is losing manufacturing jobs. Here's why.

Reporting by Bailey Schulz, USA TODAY / USA TODAY

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