In recent months, U.S. manufacturers have made significant staffing reductions, shedding thousands of jobs even as President Donald Trump promotes economic initiatives aimed at reviving the industry.
In August alone, employers in the manufacturing sector cut 12,000 positions, contributing to a total decline of 42,000 jobs since April, as reported in an analysis by the Center for American Progress (CAP) based on government labor data.
The nonpartisan policy institute attributes these job losses to several controversial policies under the Trump administration.
These include the imposition of steep tariffs on various countries, a stringent approach towards immigration, and the “big, beautiful bill,” a tax and spending package passed in July that CAP suggests adversely affects renewable energy companies by phasing out critical tax credits.
As observed, manufacturing employment in the U.S. has decreased by a total of 33,000 jobs throughout 2025, with durable goods manufacturers—those producing items like cars, household appliances, and electronics—experiencing the majority of losses.
The overall hiring environment has also slowed considerably, with only 22,000 jobs added across all sectors in August, falling short of economists’ predictions.
Historically, the American manufacturing industry has witnessed a significant decline over the past six decades.
In 1960, manufacturing accounted for about 34% of total employment, while the peak in job numbers was recorded in 1970 with 19.5 million positions.
As of August this year, the manufacturing workforce stands at 12.7 million, reflecting a staggering loss of 87,000 jobs throughout 2024, according to Labor Department figures.
Amid these troubling statistics, uncertainty has emerged as a primary factor hindering business growth.
In April, President Donald Trump announced new tariffs on numerous countries, a move designed to protect American workers by curtailing the U.S. trade deficit and incentivizing companies to relocate manufacturing jobs back to the U.S.
However, the reality has been quite the opposite.
The ongoing confusion surrounding the implementation and scope of these tariffs has left manufacturers on edge, elevating costs and creating a climate where hiring is viewed as too risky.
Sara Estrep, an economist and one of the authors of the CAP report, indicated that companies are grappling with constant changes in tariffs, leading to uncertainty in their production strategies.
“Companies are uncertain about what’s happening.
Everything has been changing on a day-to-day basis, so it’s not clear what production should look like.
That’s why they aren’t hiring,” Estrep remarked in an interview.
For example, in August, the well-known agricultural equipment manufacturer John Deere attributed a decline in its sales and operational profits to tariffs.
Executives revealed that the company incurred approximately $300 million in tariff-related expenses concerning steel and aluminum imports.
Consequently, John Deere has laid off more than 200 employees from its plants in Illinois and Iowa, as reported by AgWeb.
Similarly, the automotive industry has seen a substantial impact, announcing nearly 5,000 job cuts in July, a move linked to the tariffs as noted by Challenger, Gray & Christmas, an outplacement firm.
The retail sector has also experienced intensified layoffs and store closures amid the economic unpredictability fueled by tariff policies.
Legal challenges surrounding the Trump tariffs have further exacerbated the uncertainty manufacturers face, making future planning and investments increasingly complex.
In August, a federal appeals court ruled that President Donald Trump unlawfully invoked the International Emergency Economic Powers Act (IEEPA) to implement broad tariffs on trade partners, prompting Trump to seek a Supreme Court review of the decision.
Many industry leaders are now hesitant to expand their workforce while waiting for a resolution.
Gregory Daco, chief economist at EY-Parthenon, explained that the current slowdown reflects an environment where purchasing managers endure significant stress, trying to manage higher costs while grappling with diminished demand.
The need to streamline operations often leads companies to prioritize retaining only the most essential staff, which in turn impedes overall workforce expansion.
Additionally, the Trump administration’s crackdown on immigration has compounded the challenges facing the manufacturing sector.
Economist Daniel Altman noted that immigration has historically provided a vital labor source for various manufacturing industries, and a reduction in available workforce has prompted companies to seek automation and other capital-intensive production methods as alternatives.
Recent actions, including a significant detention of 475 immigrants at a Hyundai plant in Georgia, reflect the aggressive enforcement of immigration policies aimed at reducing the undocumented labor supply.
White House “border czar” Tom Homan confirmed on Sunday that enforcement operations affecting workplaces would intensify, asserting that businesses often hire undocumented workers to lower labor costs.
In sectors such as agriculture, food processing, and construction, it is estimated that up to 20% of the workforce consists of undocumented immigrants, according to data from Goldman Sachs.
Beyond the policies enacted by the Trump administration, other long-term trends also contribute to the ongoing decline in manufacturing employment.
The COVID-19 pandemic has accelerated investments in automation technologies, which, while increasing efficiency, have reduced the need for a larger workforce.
As Altman noted, when productivity per worker rises owing to technological advancements and automation, there is often a corresponding decrease in demand for human labor.
Thus, companies are increasingly able to achieve equivalent or enhanced output with fewer workers, aligning with broader trends in labor productivity which highlight the interplay between capital investment and workforce needs.
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