Input Stories

One year ago, President Trump stood in the Rose Garden in front of business leaders and workers and said that “jobs and factories will come roaring back to our country,” as he laid out his tariffs plan (POLITICO).

How we got here: The administration raised the effective tariff rate to 22.5% and declared April 2 “Liberation Day,” promising it would “forever be remembered as the day American industry was reborn” (The Wall Street Journal , subscription).

• Markets reacted sharply, and within days, the administration started scaling back the tariffs. After the Supreme Court ruled the tariffs issued under the International Emergency Economy Powers Act unlawful in February, the rate has dropped to 11.6%, which is still higher than any point since World War II.
• The administration subsequently shifted to the Trade Act of 1974, imposing a 10% across-the-board tariff, with more on the table. 

Where things stand now: A year later, the reality is far more complex. While the U.S. tariff rates in 2025 approached levels comparable to the 19.8% tariffs imposed by the Smoot-Hawley Act on all imports, trading partners haven’t “retaliated against the U.S.” Instead, as former Senators Phil Gramm and Donald J. Boudreaux characterize it in the Wall Street Journal, “they are trading more with each other—driving the “greatest peacetime trade diversion of the modern era.”

• “Manufacturing payrolls … declined slightly over the past year, with 98,000 fewer jobs year-over-year, according to Labor Department data—including 29,000 fewer auto manufacturing jobs and 18,000 fewer wood manufacturing jobs” (POLITICO).
• Even supporters of Trump’s protectionist approach—including labor groups—have grown frustrated with the unpredictable rollout of the “new—and often shifting duties and trade agreements,” creating uncertainty and holding businesses back from investing.
• A new poll puts the president at a 31 percent approval rating on tariffs. 
• Trade uncertainty remains the top business concern for manufacturers—for the fifth straight quarter, according to the NAM’s Q1 2026 Manufacturers’ Outlook Survey.

Looking ahead: Tariffs are expected to continue weighing on the economy.

• Tariffs have raised the price of imported inputs, which means higher producer costs (Wall Street Journal).
• The tariffs have contributed to “a sense of uncertainty, making companies reluctant to invest until the trade landscape is more settled” (POLITICO).
• As the global trade diversion makes trading partners less reliant on the U.S., “verbal promises to invest in America are unlikely to materialize” (Wall Street Journal).

The NAM says: “Manufacturers share the president’s objective of stronger growth, more investment and more jobs in the United States—and we are committed to working with the administration to make that vision a reality,” Timmons said.

• “Tariffs can be effective when they are used strategically and targeted on bad actors that don’t play by the rules. Certainty will be critical for manufacturers in sustaining that momentum. Investment decisions are made over years and decades, and clear predictable rules on how tariffs are applied will determine whether companies can move forward with confidence.”
• “The NAM’s Manufacturing Investment Accelerator Program would provide a ‘speed pass’ for critical inputs we do not make domestically but need to expand production in the United States.”