Trump overstates the number of U.S. factories lost since NAFTA while defending tariff hikes

CBS News

09-04-2025

President Trump has argued his
new tariffs
will help reverse the long decline of U.S. manufacturing, pointing to the loss of "90,000 factories" since the North American Free Trade Agreement took
effect
in 1994.
"Since the very beginning of NAFTA, our country lost 90,000 factories," Mr. Trump said during his
Rose Garden speech
on April 2, as he
announced a host of tariff hikes
. The president repeated the claim in his Monday
remarks
.
While the U.S. has seen a decline in the number of factories, the claim of 90,000 factories lost appears to be based on outdated data and includes small facilities with only a few employees.
The 90,000 figure matches a 2020 analysis by the Economic Policy Institute, a left-leaning think tank, which
found
that there was a net loss of about 91,000 manufacturing establishments between 1997 and 2018.
However, the analysis relied on Census Bureau
data
that was significantly revised in 2021, the group told CBS News. The updated figures show a net loss of about 70,500 manufacturing establishments from 1997 to 2022, the most recent year for which data is available.
The data, from the Census Bureau's Business Dynamics Statistics, also suggests that many of these shuttered facilities employed only a handful of people.
Nearly a quarter of the 70,500 closed manufacturers employed four or fewer workers, the data shows. Only 2% of the shuttered plants employed 500 or more people — there were 4,569 of those in 1997 and 3,136 in 2022.
The White House did not respond to a CBS News inquiry about the data.
Mr. Trump also
said
in the Rose Garden that "5 million manufacturing jobs were lost" since the beginning of NAFTA.
The same Economic Policy Institute analysis in 2020 found that 4.7 million manufacturing jobs were lost. More recent data from the Bureau of Labor Statistics shows job losses from January 1997 to January 2025 are closer to 4.5 million.
For years, Mr. Trump has called NAFTA the "worst trade deal ever made," blaming that agreement for undermining U.S. manufacturing jobs.
The
pact
eliminated most trade barriers between the U.S., Mexico and Canada, and remained in effect until
2020
, when Mr. Trump signed the U.S.-Mexico-Canada Agreement, or USMCA, into law. The USMCA agreement, negotiated by his administration, continued many aspects of NAFTA with
updates to some of the rules
.
Supporters
argued
NAFTA made the U.S. richer, but critics say it cost jobs — particularly in industries facing competition from lower wage workers in Mexico. Estimates vary, but Economic Policy Institute economist Robert Scott suggested in a 2014 analysis that NAFTA led to the loss of nearly 690,000
U.S. manufacturing jobs
.
However, free trade with China has been a bigger factor than a North America trade agreement, many economists say. MIT researchers
found
that nearly 1 million manufacturing jobs were lost to China from 1999 to 2011 as the U.S. normalized trade relations with the country.
Economists note free trade is far from the only cause of factory closures. Multiple U.S.
recessions
in the last few decades have also contributed.
And a
rise
in automation has caused manufacturing to shrink as a share of GDP in many developed countries across the globe since the 1950s, according to Joshua Meltzer, a senior fellow at the Brookings Institution, a nonprofit think tank.
"Essentially manufacturing has just become increasingly efficient, automated and so forth. And we've just needed less labor to be producing more and more stuff," Meltzer said.
The number of U.S. workers employed in the manufacturing industry peaked at 19.6 million jobs in 1979, according to the
Bureau of Labor Statistics
. The sector shed over 6 million jobs since then, and roughly 12.7 million people work in manufacturing today.
"You can always count manufacturing plants that have shut down, but without a broader set of context to understand why that's happened [and] what's happening to the manufacturing sector more broadly, it's just a cherry picked data point," Meltzer said.