US Manufacturing Stagnates Despite Subsidies, Tariffs

Despite bipartisan efforts—Biden's subsidies for chipmakers and electric vehicle manufacturers, and Trump's tariffs to protect domestic producers—U.S. manufacturing has remained stagnant for nearly three years. In June, factories lost 7,000 jobs, the second consecutive monthly drop, and manufacturing employment is expected to fall for the third straight year. The sector has contracted for 30 of the past 32 months, with purchasing managers reporting ongoing weakness. Post-pandemic inflation and eleven Federal Reserve interest rate hikes in 2022 and 2023 have driven up costs and limited growth. Biden's incentives have spurred a boom in factory construction and investment, but these gains have not yet led to increased production or hiring. The outlook for a manufacturing recovery remains uncertain.