US manufacturers are stuck in a rut despite subsidies from Biden and protection from Trump
The Institute for Supply Management, an association of purchasing managers, reported that manufacturing activity in the United States shrank in June for the fourth straight month. In fact, US factories have been in decline for 30 of the 32 months since October 2022, according to ISM.
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'The past three years have been a real slog for manufacturing,' said 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 2008. But we've been in this stagnant, sort of stationary environment.'
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Big economic factors contributed to the slowdown: A surge in inflation, arising from the unexpectedly strong economic recovery from COVID-19, raised factory expenses and prompted the Federal Reserve to raise interest rates 11 times in 2022 and 2023. The higher borrowing costs added to the strain.
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Government policy was meant to help.
Biden's tax incentives for semiconductor and clean energy production triggered a factory-building boom – investment in manufacturing facilities more than tripled from April 2021 through October 2024 – that seemed to herald a coming surge in factory production and hiring. Eventually anyway.
But the factory investment spree has faded as the incoming Trump administration launched trade wars and, working with Congress, ended Biden's subsidies for green energy. 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 said. 'Manufacturing is likely to suffer a recession in the coming year.'
Meanwhile, Trump is attempting to protect US manufacturers — and to coax factories to relocate and produce in America — by imposing tariffs on goods made overseas. He slapped 50 percent taxes on steel and aluminum, 25 percent on autos and auto parts, 10 percent on many other imports.
In some ways, Trump's tariffs can give US factories an edge. Chris Zuzick, vice president at Waukesha Metal Products, said 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 said. '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 US steelmakers to raise prices – and they have. US-made steel was priced at $960 per metric ton as of June 23, more than double the world export price of $440 per ton, according to industry monitor SteelBenchmarker.
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In fact, US steel prices are so high that Pilot Precision Products has continued to buy the steel it needs 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 9, for example, the president pushed the deadline back to Aug. 1 to allow more time for negotiation with US 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 said.
'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.'
Some may argue that things aren't necessarily bad for US manufacturing; they've just returned to normal after a pandemic-related bust and boom.
Factories slashed nearly 1.4 million jobs in March and April 2020 when COVID-19 forced many 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 government, 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 some. Factories added 379,000 jobs in 2021 — the most since 1994 — and then tacked on another 357,000 in 2022.
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But in 2023, factory hiring stopped growing and began backtracking as the economy returned to something closer to the pre-pandemic normal.
In the end, it was a wash. Factory payrolls last month came to 12.75 million, almost exactly where they stood in February 2020 (12.74 million) just before COVID slammed the economy.
'It's a long, strange trip to get back to where we started,' said Jared Bernstein, chair of Biden's White House Council of Economic Advisers.
Zuzick at Waukesha Metal Products said 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 said. '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 said.
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 economy, said Ned Hill, professor emeritus in economic development at Ohio State University.
'With all this uncertainty about what the rest of the year is going to look like,' he said, 'there's a hesitancy to hire people just to lay them off in the near future.'
'Everyone,' said Zuzick at Waukesha Metal Products, 'is kind of just waiting for the new normal."
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The company Friday reported adjusted earnings per share of $9.18, below the $9.82 expected, while revenue of $13.766 billion was marginally below the $13.768 billion expected. The company said in an earnings call Friday morning that it lost 117,000 residential and small business Internet customers in the quarter, compared to about 100,000 in the year ago period. Wall Street weighs Intel earnings: The 'road to recovery is long & uncertain' Wall Street remained skeptical of Intel (INTC) after the company left the future of its manufacturing business unclear during an earnings call late Thursday. Intel stock dropped Friday despite its financial results beating expectations. 'While the headline numbers look decent vs expectations, we don't think the numbers really mattered all that much,' Bernstein analyst Stacy Rasgon wrote in a note to clients Friday, saying instead that investors are focused on Intel's manufacturing roadmap. Intel, once a leading global chipmaker, has fallen behind its rivals, both with its own products and in its attempt to manufacture chips for outside customers. Truist analyst William Stein said, 'The road to recovery is long & uncertain' for Intel. That's because Intel had promised that its new manufacturing process, 18A, would bring in external customers to its cash-bleeding manufacturing business, which its former CEO Pat Gelsinger launched in 2021. Now, Intel says it will use 18A only for internal products, reaching peak production at the beginning of the next decade, and that it could 'potentially' get 'external customers at some point,' as CFO David Zinsner put it. Meanwhile, Intel also left the future of its successor to 18A, the manufacturing process it calls 14A, unclear and contingent upon it getting an external customer on board. Analysts and former Intel executives said it's crucial for the company to prove it can execute 18A to draw in outside customers to use its manufacturing business in what's known as a foundry. 'We raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products/nodes — pivotal in l-t [long term] market share and positioning,' Bank of America analyst Vivek Arya wrote. Wall Street remained skeptical of Intel (INTC) after the company left the future of its manufacturing business unclear during an earnings call late Thursday. Intel stock dropped Friday despite its financial results beating expectations. 'While the headline numbers look decent vs expectations, we don't think the numbers really mattered all that much,' Bernstein analyst Stacy Rasgon wrote in a note to clients Friday, saying instead that investors are focused on Intel's manufacturing roadmap. Intel, once a leading global chipmaker, has fallen behind its rivals, both with its own products and in its attempt to manufacture chips for outside customers. Truist analyst William Stein said, 'The road to recovery is long & uncertain' for Intel. That's because Intel had promised that its new manufacturing process, 18A, would bring in external customers to its cash-bleeding manufacturing business, which its former CEO Pat Gelsinger launched in 2021. Now, Intel says it will use 18A only for internal products, reaching peak production at the beginning of the next decade, and that it could 'potentially' get 'external customers at some point,' as CFO David Zinsner put it. Meanwhile, Intel also left the future of its successor to 18A, the manufacturing process it calls 14A, unclear and contingent upon it getting an external customer on board. Analysts and former Intel executives said it's crucial for the company to prove it can execute 18A to draw in outside customers to use its manufacturing business in what's known as a foundry. 'We raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products/nodes — pivotal in l-t [long term] market share and positioning,' Bank of America analyst Vivek Arya wrote. Crypto stocks fall as dollar moves higher Crypto stocks fell Friday — save for Robinhood (HOOD) and PayPal (PYPL). The largest corporate holder of bitcoin, Strategy (MSTR), dropped 2.5%, while crypto exchange Coinbase (COIN) fell 2% and bitcoin miner MARA Holdings (MARA) dipped 2.6%. Riot Platforms (RIOT) declined 3.6%. The moves come as the US Dollar ( strengthens amid news surrounding US trade deals and as President Trump backed off from firing Fed Chair Jerome Powell after an unusual visit to the Federal Reserve. Crypto stocks fell Friday — save for Robinhood (HOOD) and PayPal (PYPL). The largest corporate holder of bitcoin, Strategy (MSTR), dropped 2.5%, while crypto exchange Coinbase (COIN) fell 2% and bitcoin miner MARA Holdings (MARA) dipped 2.6%. Riot Platforms (RIOT) declined 3.6%. The moves come as the US Dollar ( strengthens amid news surrounding US trade deals and as President Trump backed off from firing Fed Chair Jerome Powell after an unusual visit to the Federal Reserve. Stocks crawl higher at the open US stocks inched higher, near all-time highs, at the open on Friday after a week of major earnings and trade deals. The Dow Jones Industrial Average (^DJI) ticked up around 0.15%, while the S&P 500 (^GSPC) rose just over 0.1%. The tech-heavy Nasdaq Composite (^IXIC) traded just above the flat line. US stocks inched higher, near all-time highs, at the open on Friday after a week of major earnings and trade deals. The Dow Jones Industrial Average (^DJI) ticked up around 0.15%, while the S&P 500 (^GSPC) rose just over 0.1%. The tech-heavy Nasdaq Composite (^IXIC) traded just above the flat line. Dollar gains steam after Trump downplays clash with Fed Chair Powell The US dollar ( strengthened on Friday morning after President Trump downplayed a clash with Federal Reserve Chair Jerome Powell on Thursday that was part of an unusual visit to survey the Fed's building renovations. The visit came after several weeks of Trump criticizing Powell and, at one point, threatening to fire him. Trump told reporters on Friday, "I don't want to be personal" and said that the Fed visit was about helping finish the project. Later, Trump said of firing Powell: "To do that is a big move, and I just don't think it's necessary." Meanwhile, gold futures (GC=F) declined about 1% to trade at $3,341.90 per ounce as concerns about Fed independence eased. The US dollar ( strengthened on Friday morning after President Trump downplayed a clash with Federal Reserve Chair Jerome Powell on Thursday that was part of an unusual visit to survey the Fed's building renovations. The visit came after several weeks of Trump criticizing Powell and, at one point, threatening to fire him. Trump told reporters on Friday, "I don't want to be personal" and said that the Fed visit was about helping finish the project. Later, Trump said of firing Powell: "To do that is a big move, and I just don't think it's necessary." Meanwhile, gold futures (GC=F) declined about 1% to trade at $3,341.90 per ounce as concerns about Fed independence eased. Phillips 66 stock rises after beating profit estimates on higher refining margins Phillips 66 (PSX) stock rose about 2.7% in premarket trading after the US refiner reported an adjusted profit of $2.38 per share, beating Wall Street EPS estimates of about $1.71. During the quarter, Phillips 66 returned $906 million to shareholders through dividends and share buybacks. Reuters reports that fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia's invasion of Ukraine. The company's realized margin per barrel rose 12.4% to $11.25 in the quarter from a year ago. Its crude capacity utilization was 98%, while adjusted earnings from its refining segment rose about 30% at $392 million. Phillips 66 (PSX) stock rose about 2.7% in premarket trading after the US refiner reported an adjusted profit of $2.38 per share, beating Wall Street EPS estimates of about $1.71. During the quarter, Phillips 66 returned $906 million to shareholders through dividends and share buybacks. Reuters reports that fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia's invasion of Ukraine. The company's realized margin per barrel rose 12.4% to $11.25 in the quarter from a year ago. Its crude capacity utilization was 98%, while adjusted earnings from its refining segment rose about 30% at $392 million. Health insurer Centene reports surprise quarterly loss Centene's (CNC) stock fell 12% before the bell on Friday after the health insurance company reported a quarterly loss and warned of a revenue slump from government-backed plans. Read more here. Centene's (CNC) stock fell 12% before the bell on Friday after the health insurance company reported a quarterly loss and warned of a revenue slump from government-backed plans. Read more here. Google Search is readying the next generation for AI Alphabet (GOOG, GOOGL) not only posted a stellar quarter, it succeeded in advancing another urgent mission: convincing investors it can transition its search empire into an AI-infused one. Yahoo Finance's Hamza Shaban lays it out in today's Morning Brief: Read more here. Alphabet (GOOG, GOOGL) not only posted a stellar quarter, it succeeded in advancing another urgent mission: convincing investors it can transition its search empire into an AI-infused one. Yahoo Finance's Hamza Shaban lays it out in today's Morning Brief: Read more here. Good morning. Here's what's happening today. Economic data: Durable goods orders (June preliminary) Earnings: Charter Communications (CHTR) Here are some of the biggest stories you may have missed overnight and early this morning: Intel stock falls as chipmaker cuts jobs, drops factory plans Google Search is readying the next generation for AI Trump: Australia has agreed to accept American beef Who benefits if Trump drops capital gains tax on home sales Americans are struggling to pay bills and feeling anxious about it Japan pushes back against US view of trade-deal profit split Trump and Powell clash in public — then Trump takes softer tone Amazon scraps plans for $350M cloud facility in Ireland Health insurer Centene's stock falls after surprise Q2 loss Economic data: Durable goods orders (June preliminary) Earnings: Charter Communications (CHTR) Here are some of the biggest stories you may have missed overnight and early this morning: Intel stock falls as chipmaker cuts jobs, drops factory plans Google Search is readying the next generation for AI Trump: Australia has agreed to accept American beef Who benefits if Trump drops capital gains tax on home sales Americans are struggling to pay bills and feeling anxious about it Japan pushes back against US view of trade-deal profit split Trump and Powell clash in public — then Trump takes softer tone Amazon scraps plans for $350M cloud facility in Ireland Health insurer Centene's stock falls after surprise Q2 loss Trending tickers: Deckers, Strategy and centene Here are some top stocks trending on Yahoo Finance in premarket trading: Deckers Outdoor corporation (DECK) stock rose 12% before the bell after reporting that its earnings had been boosted by Ugg boots and Hoka running shoes. Net sales for both brands surpassed analysts' estimates in the fiscal first quarter ended June 30. Strategy (MSTR) stock fell over 1% premarket today. Bloomberg reported on Friday how the company launched a new kind of preferred stock and upsized the deal from $500 million to $2.8 billion, according to a person familiar with the transaction who asked not to be identified. Centene (CNC) stock fell 10% in premarket trading after the health insurance company reported a quarterly loss. Here are some top stocks trending on Yahoo Finance in premarket trading: Deckers Outdoor corporation (DECK) stock rose 12% before the bell after reporting that its earnings had been boosted by Ugg boots and Hoka running shoes. Net sales for both brands surpassed analysts' estimates in the fiscal first quarter ended June 30. Strategy (MSTR) stock fell over 1% premarket today. Bloomberg reported on Friday how the company launched a new kind of preferred stock and upsized the deal from $500 million to $2.8 billion, according to a person familiar with the transaction who asked not to be identified. Centene (CNC) stock fell 10% in premarket trading after the health insurance company reported a quarterly loss. Intel stock slides amid plans to cut 15% of workforce, cancel factories Intel (INTC) shares slid almost 6% in premarket after the struggling chipmaker said it will cut its workforce and drop plans for factories in Europe as it pursues a comeback. While the company posted a second quarter revenue beat late Thursday, its earnings fell short. Its profit forecast for the current quarter was also more downbeat than hoped: It expects to break even, rather than deliver the $0.04 earnings per share estimated. Yahoo Finance's Daniel Howley reports: Read more here. Intel (INTC) shares slid almost 6% in premarket after the struggling chipmaker said it will cut its workforce and drop plans for factories in Europe as it pursues a comeback. While the company posted a second quarter revenue beat late Thursday, its earnings fell short. Its profit forecast for the current quarter was also more downbeat than hoped: It expects to break even, rather than deliver the $0.04 earnings per share estimated. Yahoo Finance's Daniel Howley reports: Read more here. Oil steady as investors weigh trade optimism against potential Venezuelan supply increase Oil prices climbed overnight Thursday, driven by renewed optimism over global trade negotiations, which bolstered confidence in economic growth and energy demand. The wave of positivity managing to overshadow concerns about a possible increase in Venezuelan oil supply. Reuters reports: Read more here. Oil prices climbed overnight Thursday, driven by renewed optimism over global trade negotiations, which bolstered confidence in economic growth and energy demand. The wave of positivity managing to overshadow concerns about a possible increase in Venezuelan oil supply. Reuters reports: Read more here. Sign in to access your portfolio
Yahoo
21 minutes ago
- Yahoo
EU's Von der Leyen to Meet Trump in Bid to Clinch Trade Deal
(Bloomberg) -- European Commission President Ursula von der Leyen said she will travel to Scotland this weekend to meet with US President Donald Trump, as the two sides aim to conclude a trade deal ahead of an Aug. 1 deadline when 30% tariffs on the bloc's exports are otherwise due to kick in. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Trump Administration Sues NYC Over Sanctuary City Policy After months of talks and shuttle diplomacy between Brussels and Washington DC, the two sides have been zeroing in on an agreement this past week that would see the EU face 15% tariffs on most of its trade. Limited exemptions are expected for aviation, some medical devices and generic medicines, several spirits, and a specific set of manufacturing equipment that the US needs, Bloomberg previously reported. Steel and aluminum imports would likely benefit from a quota under the arrangements under discussion but above that threshold they would face a higher tariff of 50%. 'We'll see if we make a deal,' Trump said as he arrived in Scotland on Friday. 'Ursula will be here, highly respected woman. So we look forward to that.' Trump reiterated that he believed there was 'a 50-50 chance' of a deal with the EU, saying there were sticking points on 'maybe 20 different things' that he did not want to detail publicly. Trump gave similar odds in Washington before leaving, but also said the EU had a 'pretty good chance' of reaching an agreement. Trump announced tariffs on almost all US trading partners in April, declaring his intent to bring back domestic manufacturing, to pay for a massive tax-cut extension and to stop the rest of the world from taking advantage of the US. He has also sought to remove what he describes as barriers for American companies to do business around the world. Alongside a universal levy, the US president has hit cars and auto parts with a 25% levy, and steel and aluminum with double that. He's also threatened to target pharmaceuticals and semiconductors with new duties as early as next month, and recently announced a 50% tariff on copper. The EU has been seeking quotas and a ceiling on future sectoral tariffs that the US has yet to implement but it's unclear if an initial agreement will shield the bloc from potential future levies at this stage. The agreement would also cover non-tariff barriers, cooperation on economic security matters and strategic purchases by the EU in sectors such as energy and artificial intelligence. The terms of any initial deal, which is expected to take the form of a short joint statement, would need to be approved by member states, according to people familiar with the matter. The statement is seen as a stepping stone toward more detailed negotiations. Because of the ongoing uncertainty, the EU has in parallel put together countermeasures in the event of a no-deal scenario, which would see it quickly hit American exports with up to 30% tariffs on some €100 billion ($117 billion) worth of goods — including Boeing Co. aircraft, US-made cars and bourbon whiskey — in the event of no-deal and if Trump carries through with his threat to impose that rate on most of the bloc's exports after Aug. 1 or in future. The package also includes some export restrictions on scrap metals. In a no-deal scenario, the bloc is also prepared to move forward with its anti-coercion instrument, a potent trade tool that would eventually allow it to also target other areas such as market access, services and restrictions on public contracts, provided that there is a majority of member states backing its use. (Updates with Trump remarks in paragraphs 4-6.) Burning Man Is Burning Through Cash Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P.
Buzz Feed
23 minutes ago
- Buzz Feed
Best Political Tweets 7-25-2025
American politics — well, frankly, global politics — is chaos right now, but I find it comforting to know I'm not alone in thinking the world has gone bananas. So, here are 25 of the best, most relatable, and sometimes funny political tweets from the last week: Due to photo rights, the images in the original tweet were replaced with the meme. You can read more about the end of the Trump Foundation here. And finally: See you next week!
