US Manufacturing Contracts Amid Tariff-Driven Supply Delays

In May 2025, U.S. manufacturing showed contrasting signals amid ongoing tariff impacts from President Donald Trump's trade policies. While the Institute for Supply Management (ISM) reported a contraction in manufacturing activity for the third consecutive month with a PMI of 48.5, indicating shrinking production and supply challenges exacerbated by tariffs, S&P Global's PMI indicated modest expansion at 52.0, driven in part by companies front-loading orders to mitigate tariff risks. Manufacturers expressed concerns over rising input costs, supply chain disruptions, and subdued demand from key markets such as the U.S. and UK, reflecting uncertainty despite some domestic demand improvements noted in Ireland's manufacturing sector. Economists and industry experts criticized the tariffs as ineffective for bringing back manufacturing jobs and highlighted the adverse effects on U.S. manufacturers reliant on imported components. The Trump administration's announcement to increase steel and aluminum tariffs to 50% further dampened outlooks, raising fears of prolonged supply shortages and production declines. Overall, while some segments showed resilience, the manufacturing sector faces significant headwinds due to tariff-induced cost pressures and demand uncertainties.