Summary (continued in body)
Manufacturers say President Donald Trump’s tariffs have been hurting their businesses instead of helping them expand production in the United States, according to interviews and data cited by the Associated Press in a report published this week.
The story centers on Jay Allen, who voted for Trump in hopes the Republican would cut taxes and trim regulations for his manufacturing business in northeast Arkansas. Allen, the report said, has described how tariff increases tied to the administration’s economic agenda have raised costs for equipment components needed to build power trowels, products his company sells for up to $100,000 each.
Allen Engineering Corp. makes industrial equipment used to install, finish and pave concrete. According to the report, the import taxes have increased the price of engines, steel, gearboxes and clutches produced abroad that Allen said his company needs to build its machines. Allen said the tariffs pushed his company to operate at a loss in 2025, and that his payroll fell to 140 workers from a peak of 205.
To cope, the report said, Allen Engineering raised its prices by 8% to 10% this year, even if the higher prices could mean fewer sales. Allen said, “What’s really sad is the unintended consequences of his tariffs are hurting manufacturing in our country,” adding that “Unfortunately, the working-class people are getting squeezed.”
The Associated Press report also described employment and spending trends that undercut the administration’s rationale for tariffs: forcing more factories to open in the U.S. and generating enough revenue to reduce federal budget deficits. The report said factories continued to shed workers, including 98,000 manufacturing jobs lost during Trump’s first full 12 months back in the White House, and it said American companies that pay tariffs are suing the administration for more than $130 billion in tariff refunds.
The report said the White House has defended the approach by pointing to high construction spending, more hiring as factories open, and rising manufacturing labor productivity, arguing benefits could materialize later as output ramps up. Acting White House Council of Economic Advisers chairman Pierre Yared said in an email, “It takes time to get production online, and therefore it will be some more time before we fully materialize the benefits of the president’s policies.”
In the same reporting, researchers and industry analysts said some construction “bright spots” cited by the White House reflect programs launched during the Biden administration. Skanda Amarnath, executive director of the economic policy group Employ America, said factory construction spending accelerated in 2022 with anticipation of support from Biden’s CHIPS and Science Act, which included large subsidies for chip plants. Amarnath also said construction spending on factories has slipped during Trump’s presidency, but remains relatively high because of ongoing work on Biden-era projects in states including Arizona, Texas and Idaho, and he said that interviews with regional Federal Reserve banks show some companies might expand by taking advantage of Trump’s investment tax breaks.
Even so, the report said those interviews show no overall manufacturing uptick driven by tariffs. Amarnath said, “You don’t get the sense that there is this new manufacturing renaissance underway,” framing tariff-related effects as investment deterrents rather than expansion catalysts.
The AP report pointed to uncertainty as a key driver of hesitation, describing a fast-moving tariff agenda that included more than 50 actions so far, along with tariff threats that Trump has made publicly but without necessarily implementing formal changes. It said that mix of announcements, reversals, exemptions and legal challenges has made it difficult for smaller manufacturers to plan ahead.
Allen Engineering’s situation illustrated the cost and risk, the report said. Allen said his company imports 75-horsepower diesel engines from Germany and that building them in the U.S. would require a $20 million investment—an undertaking he said would be risky if the tariff environment stays unclear. Allen asked, “Are engine-makers ‘going to spend that kind of money to move production from Germany to the U.S. when they don’t know what the landscape is going to be in three years?’” and added, “I don’t know who is going to be in the White House, and what the stance is going to be on these tariffs.”
Joseph Steinberg, an economist at the University of Toronto, said research suggests that even in a best-case scenario it could take about a decade for manufacturing employment to rise above pre-tariff levels. But the report said Steinberg characterized the actual situation as worse than that best-case, saying U.S. trade policy remains unsettled, leaving companies reluctant to expand.
The Associated Press report also described how tariffs have hit companies that rely on imported or cost-inflated inputs, including steel. It said Trump imposed steel tariffs last March and later increased them to 50% in June, and that the steel tariffs were not affected by the Supreme Court decision referenced by the story. The report said steel tariffs helped restore profits for some U.S. steel mills, but it described harms for equipment makers that use steel, including Calder Brothers in South Carolina.
Glen Calder, the company’s president, said in the report that “The steel tariffs were the first thing that got my attention,” and that his steel pricing jumped 25% two weeks before the tariffs for domestic steel took effect. Calder Brothers, the report said, makes equipment to pave asphalt.
The story also linked tariff strategy to U.S. competitiveness with China, citing worsening trade imbalance. The Associated Press report said part of Trump’s manufacturing push was to help American companies compete against China, including plans for him to visit this spring for talks with President Xi Jinping. It said the U.S. manufacturing trade imbalance rose rather than narrowed under Trump, while China’s trade surplus with the world climbed to a record $1.2 trillion.
Lori Wallach, director of the Rethink Trade program at American Economic Liberties Project, told the AP report that the approach exposes a core problem with tariff strategy and said Trump largely bypassed Congress and did not address gaps in World Trade Organization rules for trade frameworks he negotiated. Wallach said the administration did not rally partners to counter China as a unified group, leaving American manufacturers at a disadvantage because there is no coalition of nations to impose penalties for currency manipulation, subsidies and schemes to evade tariffs. Wallach said, “The general revulsion of this administration to international cooperation means they’re trying to do it alone.”
As for what comes next, the report said the problem could get worse as the administration works to craft new tariffs to replace emergency import taxes that the Supreme Court ruled illegal in February.