WASHINGTON (AP) 鈥� Jay Allen is a fan of President , and voted for him on the belief that the Republican would and trim regulations, helping his manufacturing business in northeast Arkansas.
But the have wreaked havoc on his company, Allen Engineering Corp., which makes industrial equipment used to install, finish and pave concrete. The have raised the costs of engines, steel, gearboxes and clutches made abroad that Allen needs to build power trowels that can sell for up to $100,000 each.
Allen鈥檚 experience embodies a growing body of evidence that the tariffs that Trump said would help American factories are, in fact, squashing many of them. The problem could get worse as the administration to replace the that the .
Allen said he ran his company at a loss in 2025 because of tariffs. His payroll has fallen to 140 workers from a peak of 205. To get by this year, he has hiked prices by 8% to 10%, even though that might mean fewer sales.
鈥淲hat鈥檚 really sad is the unintended consequences of his tariffs are hurting manufacturing in our country,鈥� said Allen. 鈥淯nfortunately, the working-class people are getting squeezed.鈥�
Manufacturing jobs have declined during 罢谤耻尘辫鈥檚 first year back
罢谤耻尘辫鈥檚 has been that they would force more factories to open in the U.S. and would generate enough revenue to close federal budget deficits. But .
Factories continue to shed workers, with during 罢谤耻尘辫鈥檚 first full 12 months back in the White House. American companies that foot the bill for tariffs are now for more than $130 billion in tariff refunds. Meanwhile, the federal deficit is over the next decade.
The White House maintains that construction spending is high, more workers are being hired to build factories, new investments are being made and labor productivity in manufacturing is increasing 鈥� which could eventually fuel a factory revival.
鈥淚t takes time to get production online, and therefore it will be some more time before we fully materialize the benefits of the president鈥檚 policies,鈥� Pierre Yared, the acting chairman of the White House Council of Economic Advisers, said in an email.
Construction is up 鈥� but that鈥檚 due to Biden鈥檚 bill
Some of the bright spots in construction cited by the White House appear to be the result of programs launched by then-President Joe Biden, a Democrat.
Factory construction spending began to accelerate in 2022 with the anticipation of government support from , which included big subsidies for computer chip plants. The law was a primary contributor to a historic surge in the annualized rate of construction spending on manufacturing facilities, said Skanda Amarnath, executive director of the economic policy group Employ America.
Construction spending on factories has slipped during 罢谤耻尘辫鈥檚 presidency, but the pace remains relatively high largely because of continuing work on Biden-era projects in Arizona, Texas and Idaho, Amarnath said.
Amarnath has also gone through the interviews regional Federal Reserve banks have held with businesses. Those comments show some companies might expand by taking advantage of Trump’s tax breaks on investments in equipment and new buildings.
But while the pharmaceutical drug sector might be expanding, the comments show no overall uptick in manufacturing because of 罢谤耻尘辫鈥檚 tariffs.
鈥淵ou don鈥檛 get the sense that there is this new manufacturing renaissance underway,鈥� Amarnath said.
Uncertainty in tariffs has deterred investments
Based on orders, proclamations and other statements, Trump has taken more than 50 actions on tariffs so far 鈥� and that tally doesn鈥檛 include the tariff threats he regularly makes on social media or in conversations with reporters but hasn鈥檛 formally put in place.
The , reversals, exemptions and legal challenges 鈥� as well as 罢谤耻尘辫鈥檚 decision to bypass Congress to impose tariffs 鈥� has made it difficult for smaller manufacturing companies to plan.
For example, Allen Engineering imports its 75-horsepower diesel engines from Germany. Building them in the United States would require a $20 million investment 鈥� a huge risk if the status of the tariffs is unclear.
Are engine-makers 鈥済oing to spend that kind of money to move production from Germany to the U.S. when they don鈥檛 know what the landscape is going to be in three years?鈥� Allen said. 鈥淚 don鈥檛 know who is going to be in the White House, and what the stance is going to be on these tariffs.鈥�
Joseph Steinberg, an economist at the University of Toronto, said research shows that under the best-case scenario 鈥渋t would take a decade for manufacturing employment to rise above where it was before tariffs were enacted.鈥�
But Steinberg said 鈥渢he current situation is nothing like the 鈥榖est case,鈥欌�� since U.S. trade policy is unsettled and that leaves companies reluctant to expand.
Equipment makers have been hit hard by rising steel costs
About 98% of U.S. manufacturing establishments have fewer than 200 workers, according to Census Bureau data, and don鈥檛 have the kind of name-brand recognition or lobbying heft to minimize the damage from tariffs that big players like Apple, General Motors and Ford possess.
The Association of Equipment Manufacturers in February reported that America鈥檚 share of global manufacturing severely lags China’s. The group has urged tax credits to offset the expense of tariffs, and specifically called for tariff relief on raw materials, parts and components that cannot be acquired domestically at scale.
have been a particular concern. Trump imposed them last March and hiked them to 50% in June. They were not affected by the Supreme Court decision.
Trump has credited the tariffs with restoring profits at American steel mills. But they have hurt companies that use that steel, like Calder Brothers in South Carolina, which makes equipment to pave asphalt.
鈥淭he steel tariffs were the first thing that got my attention,鈥� said Glen Calder, the company鈥檚 president. 鈥淢y steel pricing jumped 25% two weeks before the tariffs went into effect for domestic steel. The market price just jumped. It has stayed elevated.鈥�
Meanwhile, China鈥檚 trade surplus has grown
Part of 罢谤耻尘辫鈥檚 push to expand manufacturing was to help American companies 鈥� a country he for talks with its leader, Xi Jinping.
But the U.S. manufacturing trade imbalance rose last year under Trump instead of narrowing. Meanwhile, China鈥檚 trade surplus with the world climbed to a record $1.2 trillion.
This trend exposes one of the big problems with 罢谤耻尘辫鈥檚 tariff strategy, said Lori Wallach, director of the Rethink Trade program at American Economic Liberties Project. She noted that he largely bypassed Congress and failed to address gaps in the World Trade Organization鈥檚 rules for the trade frameworks that he negotiated with other countries.
Instead of working with partners to ensure there were penalties for foreign manufacturers with abusive labor practices and unfair subsidies, Trump chose against rallying partners to counter China as a unified group. American manufacturers are at a disadvantage, Wallach argued, because there is not a coalition of nations that can impose penalties for currency manipulation, subsidies and schemes to evade tariffs.
鈥淭he general revulsion of this administration to international cooperation means they鈥檙e trying to do it alone,鈥� Wallach said.
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