Trade War Impacts: Manufacturing Job Losses and Diminishing Employment Prospects in the US
Following the implementation of President Trump’s trade war measures this spring, the transportation sector experienced a negative shift, and recent data indicates a broader impact on US employment, particularly within manufacturing.Slok research reveals that while sectors affected by tariffs have seen job losses in recent years, this marks the first instance of sustained negative payroll growth for several consecutive months. This research is based on quarterly averages of employment data from the Bureau of Labor Statistics (BLS).While employment in non-tariff-affected industries continues to grow, the rate of increase has slowed compared to pre-trade war levels.
“The impact of the tariff on recruitment is now undeniable. Manufacturing rise, recruitment surge, does not occur,” stated Joe Brusuelas, Chief Economist at RSM, as reported by CNN Business on October 9, 2025.
the August job report released last Friday confirmed this trend,showing a decline in manufacturing employment for four consecutive months. The BLS data indicates the US manufacturing industry currently employs 78,000 fewer people than it did last year.
While tariffs aren’t expected to drastically increase manufacturing jobs overnight, economists are increasingly concerned about the unintended consequences of the administration’s trade strategy. They point to two key factors: increased uncertainty paralyzing businesses in affected industries, leading to reduced hiring, and rising costs of essential raw materials like steel, aluminum, and copper. This increase in input costs negates potential benefits for US producers.
“It turns out that the economist is true that launching a trade war will result in slower growth and reduced employment. that is what is happening,” Brusuelas commented.
The decline in manufacturing jobs is contributing to a broader slowdown in US employment growth. JPMorgan research shows that employment growth has slowed to just 29,000 over the past three months, a notable drop from the 105,000 recorded in the previous quarter. The unemployment rate remains low, but has risen from 4.1% in June to 4.3% in August – the highest level sence the end of 2021.
This weakening job market is impacting consumer confidence. A survey released Monday by the Federal Reserve Bank of new york revealed that consumers now believe ther is only a 45% chance of finding a new job, down from 51% in July.This is the lowest level recorded since the survey began in 2013 and is substantially lower than during most of President Trump’s first term. The Fed New York noted the most pronounced decline in job prospects was among those with a high school education.
(shc/kil)
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