ON THE CAMPAIGN trail in 2024, Donald Trump promised a tariff-fuelled revival of America’s old industrial towns. In Latrobe, Pennsylvania, he vowed to “bring back our manufacturing jobs, our energy jobs... and our dreams.” In Detroit he talked about manufacturing jobs moving from Mexico to Michigan. The promise was not simply more American-made goods, but more Americans making them. Has the president delivered?
Mr Trump believes he has, with some justification. The Institute for Supply Management’s survey of manufacturing purchasing
ON THE CAMPAIGN trail in 2024, Donald Trump promised a tariff-fuelled revival of America’s old industrial towns. In Latrobe, Pennsylvania, he vowed to “bring back our manufacturing jobs, our energy jobs... and our dreams.” In Detroit he talked about manufacturing jobs moving from Mexico to Michigan. The promise was not simply more American-made goods, but more Americans making them. Has the president delivered?
Mr Trump believes he has, with some justification. The Institute for Supply Management’s survey of manufacturing purchasing managers has indicated expanding factory activity every month this year (see chart 1). The Federal Reserve’s industrial-production index shows that real manufacturing output grew at a 4.5% annualised rate in the first half of 2026—its fastest pace since 2011, excluding the rebound after covid-19. This month Ford said it would shift production of some models from China to America beginning in 2030, a decision its boss linked directly to the administration’s tariff policy.
If any industry embodies American manufacturing, it is carmaking. Mr Trump has made it a particular focus of his tariff policy. He has imposed a 25% levy on imported cars and many imported parts. Trade talks between America and Canada recently broke down in part over the industry. Mr Trump then threatened to raise tariffs on all cars, trucks, car parts and steel from Canada to 50% from January 1st.
The president can point to some results. From December 2025 to July 2026 auto production jumped about 9%, accounting for around a quarter of the overall rise in manufacturing. Ford is not the only carmaker changing its plans. General Motors (GM) will also shift production of some models from China to America, thereby avoiding tariffs of more than 50% on Chinese-built vehicles. GM has cut back Canadian operations, too. Stellantis (whose largest shareholder part-owns The Economist’s parent company) has moved future production from Canada to America. Honda is moving production of its Civic from Mexico to Indiana.
These plans, however, do little to explain the rebound in output that has already occurred. That owes more to a recovery from supply disruptions late last year, strong demand for pickups and SUVs, and the launch of new models. For now, tariffs are doing more to raise costs than boost output. GM estimates that tariffs will set it back $2.5bn–3.5bn this year, largely because it still imports vehicles and parts.
In other industries the manufacturing upswing was already under way before Mr Trump’s return to office. Aircraft production grew by nearly 9% in the first half of the year, but the industry’s recovery began in 2022. Electrical-equipment makers are still benefiting from an investment cycle accelerated by policies enacted under Joe Biden. Tax credits and subsidies for renewables helped spur spending on transformer factories and other grid equipment, says Donald Leavens, chief economist at the National Electrical Manufacturers Association. “A lot of that is still playing out today.”
Some of the strongest manufacturing sectors are also among those least protected by tariffs. Take the AI boom, which has lifted demand for equipment and materials through the construction of data centres and related energy infrastructure. From December 2025 to July 2026 output of semiconductors and electronic components rose more than 12%, data-centre cooling equipment almost 4% and cement nearly 9%. The Economist estimates that in the first half of 2026 the broader data-centre and power buildout accounted for nearly a third of the increase in manufacturing output.
While some AI hardware, such as semiconductors, is increasingly a target of tariff policy, the administration has also recognised that imports are essential to the boom. As a result, many AI-related imports—particularly those used to build data centres—have been carved out of broader tariffs. The pattern extends beyond AI. Scott Lincicome of the Cato Institute, a libertarian think-tank, calculates that aerospace and computers and electronics face effective tariff rates of less than 5%, among the lowest in manufacturing. Meanwhile, manufacturing mainstays facing higher tariffs—from food, textiles and furniture to paper, plastics and wood products—have barely grown this year.
What about those jobs?
For voters the real test of Mr Trump’s manufacturing and tariff policy was not just higher output, but more jobs. On that score, the renaissance is harder to find. In the first seven months of the year manufacturing payrolls edged up by about 31,000—a tiny gain compared with the 315,000 factory jobs lost during the three years to the end of 2025. Aerospace and industries tied to the construction of data centres and power infrastructure accounted for virtually all of the net job growth. More detailed data, available through June, show that those industries added roughly 29,000 jobs between them.
Across more traditional manufacturing, meanwhile, employment fell by roughly 34,000, with losses in industries such as food processing and plastics. Even in some of the industries driving the production rebound, job gains have been modest (see chart 2). Employment in the car industry is up by less than 1%. Chipmakers, meanwhile, have shed workers even as output has surged—an unsurprising development in such a capital-intensive industry.
Where manufacturing jobs are appearing, they look rather different from the traditional factory work Mr Trump evokes. Aircraft plants, for example, need engineers and technicians. Nearly six in ten workers have a bachelor’s degree or higher; only one in five works on the factory floor. The infrastructure boom is similarly brainy. Almost half of workers have degrees, while only about a quarter are in hands-on production job.
The revival, in other words, is conspicuously short of factory hands. Even if more carmaking returns later this decade, the armies of assembly workers will not. Robots now do much of the work. Meanwhile, the industries expanding fastest are already struggling to find enough skilled workers. More than half of aerospace firms report shortages of technicians; Mr Leavens sees the same problem among electrical-equipment makers. Mr Trump’s presidency may see investment in robot-filled factories and create demand for highly skilled workers. That would constitute a manufacturing revival, but perhaps a different one than the president’s supporters hoped for.
One Subscription.
Get 360° coverage—from daily headlines
to 100 year archives.
Archives
HT App & Website