A check-in on manufacturing jobs, one year since Trump's tariffs

President Trump has said that his tariffs will help protect American industries and bring back American jobs, specifically in the manufacturing industry, which has seen a sharp decline in the last 40 or so years. But what do tariffs really do to solve or ameliorate that problem?

A year ago, in our “Selling America” special, “Marketplace” host Kai Ryssdal spoke with Matt Notowidigdo, professor of economics at the University of Chicago’s Booth School of Business, about whether tariffs can help reshore manufacturing jobs.

Almost a year later, we checked back in with Notowidigdo to hear how the president’s promise to bring back manufacturing jobs has played out. The following is an edited transcript of their conversation.

Kai Ryssdal: Here we are, a day shy of one year since the President's tariff-palooza. What, if anything, has changed in American manufacturing?

Matt Notowidigdo: Well, we've got fewer manufacturing jobs than a year ago, which suggests maybe that tariffs weren't having their intended impact. But overall, I would say the impacts have been pretty minimal. You know, we're not in a recession yet, for example.

Ryssdal: Well, there is that, although there is the war. So we're going to keep an eye on that one. But let me ask you the bigger picture question: Is there something about the American economy that has made this tariff thing that the President's been trying to do, for all the harm it has done, for all the uncertainty and for all of that, expectations had been that it would be far, far worse. And it turns out that's not the case. Why?

Notowidigdo: Yeah, I think this is a reminder that the U.S., it's a big country, it's a big economy. We don't rely a lot on imports and exports. There's a lot of internal, domestic factors. And so it's a reminder that, you know, tariffs can only do so much harm, or maybe on the flip side, they can only do so much good. There's only so much that tariffs can do. Because at the end of the day, the U.S. economy is just mostly driven by our own internal supply and demand, not really what's happening internationally.

Ryssdal: That seems to be an important point. We are so big, so resilient and do so much here, that international trade is not huge for us.

Notowidigdo: I mean, we're not Belgium. It'd be pretty different if you impose tariffs on on what economists would say as a small, open economy like Belgium or the Netherlands, but the U.S., we can self-sustain our own economy pretty well without relying a lot on on other countries or other economies. And I think really what we're seeing over the last year is just a reminder of that basic fact.

Ryssdal: What do you suppose the past year of on again, off again tariffs have meant for companies that do still make stuff here?

Notowidigdo: The uncertainty has been one of the major stories here, because if the tariffs were signed as set in stone, and everyone knew that they were going to stay where they are, then businesses could start to make decisions and plans around it. But there's been so much uncertainty about, are the tariffs going to be on? Are they going to be off? They're changing on a day to day to day basis, then the Supreme Court is going to be involved. I think it's been very paralyzing to some companies that make it hard to make decisions when you don't actually know what the tariffs are going to be in the future. I found a quote of a CEO saying they're “in a bit of limbo-land,” because how can you make a decision when you don't know what the tariffs are going to be a month, two months, three months from now? And I think that policy uncertainty has been an unfortunate feature of what we've been dealing with over the last year.

Ryssdal: So let's talk about the thing that we talked about when we had you on the special, the “Selling America” special, a while ago, and that is, manufacturing jobs are good, solid jobs. We don't make all that many things in this country anymore. What can we do to protect that slice of this economy? What can we do to help those workers and to help those Americans?

Notowidigdo: One of the things I've been following is the Chips Act that was passed a few years ago, and that was supposed to bring back semiconductor manufacturing. I mean, that's something that we could do more of in this country with the right amount of training. If you train enough electrical engineers and material scientists and process engineers, there's really no reason that we couldn't manufacture many more semiconductors in the United States. So that's an example of what you could do. I'm not sure that tariffs are the best way to get there, but I think it's a pretty reasonable idea.

Ryssdal: Let me ask a better question, Should we be trying to have substantial manufacturing the way it was in this country, 50, 60, 80 years ago?

Notowidigdo: I still feel the same way as I did a year ago about that, which is that it's been hard to get young workers to work in manufacturing, because I think they just don't see it as the as the future of work, as much as jobs and technology or health care. I'm singling out semiconductors, just because — this is not my expertise, but you can imagine almost a foreign policy reason why you wouldn't want to completely rely on other countries to produce something that's so important to the modern economy. But my own view is just focusing so much on manufacturing jobs, and manufacturing is already a very small part of the economy, feels pretty misguided to me.