Trump Vowed to Lift Manufacturing: The Sector Is Sputtering

President Trump has claimed that his sweeping tariff regime will reshore American companies and revive manufacturing in the U.S. So far, that hasn't happened.

- Chao Deng & John Keilman

Economic activity tied to manufacturing has shrunk for most of Trump's second term.

A few investments and pledges aimed at beefing up domestic manufacturing appear timed to appease the president, and may or may not come to fruition. The latest is from Apple, which is planning to commit an additional $100 billion to the U.S., after saying in February it would spend more than $500 billion in the country over four years to make servers and parts for its key products.

Beneath the shiny announcements lies a sector that can't seem to get off the ground. From March to July, U.S. manufacturing activity contracted, according to the Institute for Supply Management's monthly survey. The Manufacturing PMI last registered at 48, below the 50 score that differentiates growth and decline.

The effective average tariff rate on all imported goods now stands at roughly 18% versus 2.3% last year, the highest levels since the 1930s.

Still, some economists say Trump's tariffs, set to take a broader effect on Thursday, aren't high enough to bring companies back. Major U.S. trade partners like South Korea, the European Union and Japan, for example, all face 15% tariffs, below the 25%-to-30% levels the president once threatened.

Tariff levels might be high enough to bring back production of some textiles but probably not enough to encourage additional production of cars and steel in a significant way, said William Reinsch, senior adviser at the Center for Strategic and International Studies.