How the U.S. Lost Its Tag as the Manufacturing Powerhouse

President Trump says his tariff plan will restore American manufacturing might, but economists are skeptical

- Justin Lahart

In the 1950s, around 35% of private-sector jobs in the U.S. were in manufacturing. Today, there are 12.8 million manufacturing jobs in the U.S., an amount equal to 9.4% of those private-sector jobs.

President Trump says his sweeping tariff regime is aimed at bringing manufacturing back to the U.S. Economists are skeptical that tariffs could make that a reality, and worry that the damage they create will outweigh any benefits.

To understand whether restoring manufacturing to the U.S. is possible, it helps to first understand how the U.S. lost its place as the world's manufacturing powerhouse.

The rise of U.S. manufacturing America's rise to becoming a global manufacturing juggernaut was driven by a confluence of factors.

In the early 1900s, the U.S. pioneered the use of interchangeable parts and organizing factors for mass production. World War II prompted a massive increase in manufacturing capacity, while also devastating competitors, points out Case Western Reserve University economist Susan Helper.

In the postwar years, more Americans joined the middle class, driving jumps in spending on long-lasting durable goods, like the cars and appliances for their newly purchased homes. America was America's best customer for manufactured goods.

Many of these goods were high-tech for the time, such as dishwashers, televisions, and jets, often brought about by the host of innovations developed during the war. Making them in America, as opposed to some other country, made sense because staying on the leading edge required research and development teams working closely with the factory floor.

It helped, too, that thanks to the high-school education movement that began in the early 20th century, the U.S. had the most educated workforce in the world.

Services take the wheel