US manufacturers are stuck in a rut despite subsidies from Biden and protection from Trump

By PAUL WISEMAN Associated Press Economics Writer WASHINGTON AP Democrats and Republicans don t agree on much but they share a conviction that the governing body should help American manufacturers one way or another Democratic President Joe Biden handed out subsidies to chipmakers and electric car manufacturers Republican President Donald Trump is building a wall of import taxes tariffs around the U S commercial sector to protect domestic industry from foreign competition Yet American manufacturing has been stuck in a rut for nearly three years And it remains to be seen whether the trend will reverse itself The U S Labor Department reports that American factories shed jobs in June for the second month in a row Manufacturing employment is on track to drop for the third straight year Related Articles At present in History July the storming of the Bastille In a nation growing hostile toward drugs and homelessness Los Angeles tries leniency Long after the fuss over Pope Leo XIV the village of Dolton will still be here The EU is delaying retaliatory tariffs on US goods in hopes of reaching a deal by Aug Photos show Trump assassination attempt on the one year anniversary The Institute for Supply Management an association of purchasing managers revealed that manufacturing activity in the United States shrank in June for the fourth straight month In fact U S factories have been in decline for of the months since October according to ISM The past three years have been a real slog for manufacturing reported Eric Hagopian CEO of Pilot Precision Products a maker of industrial cutting tools in South Deerfield Massachusetts We didn t get destroyed like we did in the recession of But we ve been in this stagnant sort of stationary milieu Big economic factors contributed to the slowdown A surge in inflation arising from the unexpectedly strong economic recovery from COVID- raised factory expenses and prompted the Federal Reserve to raise interest rates times in and The higher borrowing costs added to the strain Administration procedures was meant to help Biden s tax incentives for semiconductor and clean power production triggered a factory-building boom venture in manufacturing facilities more than tripled from April through October that seemed to herald a coming surge in factory production and hiring Eventually anyway But the factory venture spree has faded as the incoming Trump administration launched bargain wars and working with Congress ended Biden s subsidies for green vigor Now predicts Mark Zandi chief economist at Moody s Analytics manufacturing production will continue to flatline If production is flat that suggests manufacturing employment will continue to slide Zandi announced Manufacturing is likely to suffer a recession in the coming year Meanwhile Trump is attempting to protect U S manufacturers and to coax factories to relocate and produce in America by imposing tariffs on goods made overseas He slapped taxes on steel and aluminum on autos and auto parts on plenty of other imports In a few techniques Trump s tariffs can give U S factories an edge Chris Zuzick vice president at Waukesha Metal Products explained the Sussex Wisconsin-based manufacturer is facing stiff competition for a big contract in Texas A foreign company offers much lower prices But when you throw the tariff on it gets us closer Zuzick mentioned So that s definitely a situation where it s beneficial But American factories import and use foreign products too machinery chemicals raw materials like steel and aluminum Taxing those inputs can drive up costs and make U S producers less competitive in world markets Consider steel Trump s tariffs don t just make imported steel more expensive By putting the foreign competition at a disadvantage the tariffs allow U S steelmakers to raise prices and they have U S -made steel was priced at per metric ton as of June more than double the world export price of per ton according to industry monitor SteelBenchmarker In fact U S steel prices are so high that Pilot Precision Products has continued to buy the steel it demands from suppliers in Austria and France and pay Trump s tariff Trump has also created considerable uncertainty by repeatedly tweaking and rescheduling his tariffs Just before new import taxes were set to take effect on dozens of countries on July for example the president pushed the deadline back to Aug to allow more time for negotiation with U S trading partners The flipflops have left factories suppliers and customers bewildered about where things stand Manufacturers voiced their complaints in the ISM survey Customers do not want to make commitments in the wake of massive tariff uncertainty a fabricated metal products company noted Tariffs continue to cause confusion and uncertainty for long-term procurement decisions added a computer and electronics firm The situation remains too volatile to firmly put such plans into place Various may argue that things aren t necessarily bad for U S manufacturing they ve just returned to normal after a pandemic-related bust and boom Factories slashed nearly million jobs in March and April when COVID- forced multiple businesses to shut down and Americans to stay home Then a funny thing happened American consumers cooped up and flush with COVID relief checks from the governing body went on a spending spree snapping up manufactured goods like air fryers patio furniture and exercise machines Suddenly factories were scrambling to keep up They brought back the workers they laid off and then several Factories added jobs in the greater part since and then tacked on another in But in factory hiring stopped growing and began backtracking as the business sector returned to something closer to the pre-pandemic normal In the end it was a wash Factory payrolls last month came to million almost exactly where they stood in February million just before COVID slammed the business sector It s a long strange trip to get back to where we started noted Jared Bernstein chair of Biden s White House Council of Economic Advisers Zuzick at Waukesha Metal Products explained that it will take time to see if Trump s tariffs succeed in bringing factories back to America The fact is that manufacturing doesn t turn on a dime he disclosed It takes time to switch gears Hagopian at Pilot Precision is hopeful that tax breaks in Trump s One Big Beautiful Bill will help American manufacturing regain momentum There may be light at the end of the tunnel that may not be a locomotive bearing down he declared For now manufacturers are likely to delay big decisions on investing or bringing on new workers until they see where Trump s tariffs settle and what impact they have on the financial market commented Ned Hill professor emeritus in economic evolution at Ohio State University With all this uncertainty about what the rest of the year is going to look like he announced there s a hesitancy to hire people just to lay them off in the near future Everyone stated Zuzick at Waukesha Metal Products is kind of just waiting for the new normal