Analysis: New Trump Tariffs Threaten Manufacturing Jobs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ A new analysis reveals President Trump’s proposed tariffs could increase U.S. manufacturing costs by up to 4.5%. Economists warn these hikes could trigger layoffs, plant closures, and stagnant wages in key swing states. While Trump insists the tariffs won’t fuel inflation, business owners already feel the financial squeeze.
Trump’s Tariffs and Factory Costs: Quick Looks
- New tariffs could raise factory costs 2–4.5%, per Washington Center for Equitable Growth.
- Industries in swing states like Michigan and Wisconsin face significant exposure.
- Trump aims to impose tariffs of 15–50% on goods from dozens of countries.
- Artificial intelligence and tech manufacturing may be heavily impacted.
- Domestic steel prices rising, even for companies that don’t import.
- Tariff backlash expected as consumer prices increase, despite Trump’s denial of inflation.
- Trump’s tariff agenda targets global goods while claiming benefits to American workers.
- U.S. stock market relieved tariffs weren’t as steep as feared.
- Critics say average households could lose up to $2,400 annually.
- Legal challenges mount over Trump’s use of emergency tariff authority.
Deep Look: Trump’s Tariffs May Raise Factory Costs, Threaten U.S. Jobs
WASHINGTON (AP) — As former President Donald Trump advances his economic agenda with a new wave of global tariffs, economists are sounding the alarm about the ripple effects on American manufacturing. A new analysis by the Washington Center for Equitable Growth reveals the proposed tariffs could increase U.S. factory operating costs between 2% and 4.5%, posing risks to jobs, wages, and local economies, especially in industrial swing states.
“There’s going to be a cash squeeze for a lot of these firms,” said Chris Bangert-Drowns, the researcher behind the study. Even small cost increases could result in wage stagnation, layoffs, or plant closures, he warned.
Trump’s latest tariff framework—targeting imports from the European Union, Japan, Indonesia, the Philippines, and Britain—calls for taxes between 15% and 50%, with enforcement set to begin Friday. The administration claims the measures will combat trade imbalances, reduce the budget deficit, and reinvigorate domestic manufacturing.
Political Gamble or Economic Burden?
Trump has long touted tariffs as tools to extract concessions from foreign governments and promote American-made goods.
“We’ve wiped out inflation,” he said Friday before boarding Marine One en route to Scotland.
But many independent economists and industry leaders disagree. A June Federal Reserve survey found U.S. companies plan to pass on half the tariff costs to consumers through price hikes. And Labor Department data show a loss of 14,000 manufacturing jobs since April—when Trump’s first round of tariffs took effect.
Key Swing States on Edge
Manufacturing-heavy states like Michigan and Wisconsin are especially vulnerable. Over 20% of jobs in these states are tied to sectors including construction, oil drilling, and mining, which are directly impacted by import taxes.
These states will likely play pivotal roles in the 2024 election, and local discontent with tariff-related job losses could erode support for Trump.
“We’re getting squeezed from all sides,” said Justin Johnson, president of Jordan Manufacturing Co. in Michigan, which produces parts for Amazon warehouses and auto manufacturers.
Tariffs Disrupting Supply Chains
Even businesses that don’t import directly are affected. Johnson explained that while his company buys U.S.-made steel, Trump’s tariffs on foreign steel have eliminated overseas competition, allowing domestic suppliers to raise prices by 5% to 10%.
“There’s no red-blooded capitalist who isn’t going to raise his prices,” he added.
In Montana, Josh Smith, president of Montana Knife Co., voiced similar concerns. His company recently purchased a $515,000 bevel-grinding machine from Germany. With a 15% tariff, the tax alone will cost over $77,000—enough to fund a full-time employee.
Smith noted that there are no U.S. suppliers for such machinery. “There’s only two companies in the world that make them, and they’re both in Germany,” he said.
Imported Steel Problems and Limited Options
Smith also buys powdered steel previously sourced from Crucible Industries in New York. However, after the firm filed for bankruptcy and was acquired by Sweden-based Erasteel, the steel is now imported—and subject to a looming 50% tariff starting in 2026.
“I want to buy more equipment and hire more people,” Smith said. “But I’m making decisions every day based on tariff risks.”
Trump Administration Dismisses Inflation Concerns
Despite mounting evidence, the Trump White House maintains tariffs haven’t caused inflation. A recent Council of Economic Advisers report cited falling import prices from December to May.
But economists like Ernie Tedeschi, director at Yale University’s Budget Lab, say the internal metrics show import prices have actually accelerated recently. According to his research, Trump’s tariffs could cost the average U.S. household $2,400 annually.
Legal and Economic Uncertainty Ahead
While Trump relies on the “emergency” provision of trade law to enforce tariffs, that legal basis is under review in a federal appeals court this week. The administration argues that foreign nations have little choice but to comply in order to retain access to the U.S. market.
“Everyone is willing to pay a toll,” said Treasury Secretary Scott Bessent, referring to foreign countries. But domestic manufacturers say they’re the ones footing the bill.
With Trump’s strategy facing increasing resistance from economists, courts, and manufacturers, his tariff war may offer more political spectacle than economic stability.
