Tariffs are meant to boost US manufacturing. Is America ready?

Yahoo

6 hours ago

Winton Machine, an Atlanta-based manufacturer, is desperate to hire. So far, there are few takers.
CEO and co-founder Lisa Winton has been searching for a salesperson since March. A mechanist job has been open even longer, with less than a dozen applications over the past year – none of whom had the skillset required for the job.
Winton has done what she can to attract workers, like forming a relationship with local technical colleges, offering applicants flexible hours and rehiring retirees. Still, keeping her staffing up has been a challenge.
The push for more domestic manufacturing through tariffs, Winton worries, will only make matters worse.
'If more factories move into an area, who are they competing with? They're competing with other factories," she said. "Whether it be machinists or maintenance or assembly, all of the different types of jobs that are available – they have to come from somewhere.'
President Donald Trump has said his tariffs, which range from a 10% baseline tariff on trade partners to 50% on steel imports, will have jobs and factories 'come roaring back.'
'The end game is to have production here. Any country that wants to produce here doesn't pay a tariff. That's the ultimate solution,' Trump's top trade adviser, Peter Navarro, told ABC News in early April.
It's not clear that America is prepared for that shift.
Building new manufacturing facilities can take up to 10 years, depending on the industry, and experts say the country's infrastructure isn't primed to handle additional factories. Meanwhile, a manufacturing labor shortage could mean new factories have a hard time filling roles.
'If the Trump administration's vision is to bring manufacturing back to America en masse – not just in a few sectors, but en masse – that vision isn't realistic," said Nancy Qian, an economics professor at Northwestern's Kellogg School of Management.
It's not clear how many businesses will shift production to the U.S. because of tariffs. Those that do reshore face a lengthy process.
'Most companies do not make a decision to onshore or to build a new factory or plant lightly,' said Erin McLaughlin, a senior economist at the Conference Board, a nonprofit business-research group. 'This is something for most companies that they strategize many years in advance.'
First, companies must figure out where to build. The location needs to be close to transportation corridors, good water supplies and on a stable electric grid – something easier said than done with current U.S. infrastructure, which earned a C in its 2025 report card from the American Society of Civil Engineers, according to McLaughlin.
Then, companies must purchase the land, obtain proper permits and inspections, design their factory, purchase equipment and select a construction team.
Only then can they start construction. The process generally takes three to 10 years, depending on the industry, McLaughlin said.
Certain projects can be done in less time, although the timeline can be challenged by growing competition for sites with access to a stable electric grid, according to Jeff Bischoff, chief sales officer at Lexington, Kentucky-based designer-builder Gray.
'Power generation is not keeping up right now with demand,' Bischoff said. 'All the utilities are doing their best to try to keep up and get ahead of that. But it's a several-year process.'
Trump has acknowledged that infrastructure changes will be necessary, and believes it would take roughly two years to get his vision for manufacturing up and running.
'You've got to build a thing called a factory. You have to build your energy. You have to do a lot of things,' Trump said on April 7, adding that he would give businesses approvals for electric plants in 'record timing.'
But McLaughlin believes a two-year turnaround for bolstering the U.S. manufacturing sector could be optimistic. Even if executive orders speed up federal approvals, she said, factories would likely still need to worry about state and local permits.
More complications could arise if the Trump administration continues to crack down on immigration, with roughly 20% of manufacturing workers in the U.S. foreign-born, according to labor market analytics firm Lightcast. An even higher share – roughly 30% – are foreign-born in construction.
"We don't want to be over reliant on one trading partner for certain things,' McLaughlin said. But 'I don't think the U.S. is prepped and primed for everything to be manufactured here.'
Are tariffs worth the pain? Trump says the ultimate fruits of tariffs will be worth the pain. Experts disagree.
Trump's push for more factories comes after a dramatic decline in manufacturing jobs. After accounting for roughly 22% of total nonfarm employment in 1979, manufacturing work makes up just 8% today.
Even if tariffs were able to eliminate the entire U.S. trade deficit in manufacturing, that would still only bump that share up to about 10% of employment – still less than half of its share in the late 1970s, according to Robert Lawrence, a Harvard professor of international trade and investment and author of 'Behind the Curve: Can Manufacturing Still Provide Inclusive Growth?'
'Even in its most successful form, this is barely noticeable,' Lawrence said.
Other experts warn that even that level of growth could exacerbate the hiring challenges manufacturers face today.
Manufacturers have been struggling to fill jobs for years, including during a post-pandemic construction boom, when supply chain issues pushed more manufacturers to build facilities closer to home.
The number of manufacturing establishments in the U.S. increased by more than 11% between the first quarter of 2019 and the second quarter of 2023, according to a 2024 report from Deloitte. Despite the growth, manufacturing jobs have remained essentially flat since 2019, discounting a pandemic-era dip.
That's partially due to automation; factories today need fewer workers. But nearly half of manufacturers say attracting and retaining talent has been a major challenge, according to a first-quarter survey from the National Association of Manufacturers. Bureau of Labor Statistics data shows there were 381,000 manufacturing job openings as of April.
By 2033, manufacturing could have 1.9 million unfilled jobs – roughly half of open positions – due to a skills and applicant gap, according to Deloitte.
'We absolutely do not have enough people ready to take these jobs,' said Rachel Sederberg, senior economist at Lightcast. 'That is going to be a very significant challenge if more and more manufacturing – or more and more of anything – comes back to the U.S.'
One issue is that manufacturing workers are aging out of the workforce. Just over one-third of manufacturing employees in the U.S. are 55 or older and nearing retirement, according to a recent report from Lightcast, which is expected to make the shortage even more acute.
And attracting new talent to backfill these positions hasn't been easy.
As factories turn to more automation, manufacturers say they're having trouble finding talent with the right skillset to manage the more advanced technology.
'Not every manufacturing job today requires a degree, but every single manufacturing job today requires skills,' said Carolyn Lee, executive director of the Manufacturing Institute, a nonprofit focused on workforce development and education within the industry.
Lee said obtaining those skills can take anywhere from a day or two for a forklift certification to up to four years of education and apprenticeship programs for maintenance technicians, one of the most in-demand manufacturing jobs today.
There are some signs of renewed interest in trade jobs. Enrollment in public two-year institutions that focus on vocational programs was up 14% year-over-year in 2024, outpacing the 3% growth in public four-year schools, according to a May 12 Wells Fargo report.
But Lightcast found there are still not enough students learning relevant skills to keep up with job demand. For instance, there were just 400 machinist program completions in Texas in 2023 compared to roughly 16,000 related job openings in the state.
Research suggests manufacturing's reputation as dirty and dangerous has made the industry less appealing to younger Americans, especially amid a period of low unemployment.
The Deloitte report says 'a different set of expectations' among millennial and Generation Z workers, many of whom were pushed to go to college instead of working in the trades, has made it difficult for manufacturers to attract and retain workers.
'The consensus among American manufacturers is this generation of Americans just don't want these jobs anymore," said Qian of Northwestern.
Fear of lower wages may also be keeping workers away.
Manufacturing work today can pay well, and some research finds it tends to pay better than other sectors that don't require college degrees. But as of 2018, the average hourly earnings for manufacturing employees fall short of average overall employee earnings, according to the Bureau of Labor Statistics.
There's a reason so many American companies rely on factories abroad; operating in the U.S. tends to be more expensive.
For one, labor costs are higher. Take the average annual machine operator salary, which is nearly $45,000 in the U.S. compared to $15,000 in China and less than $5,000 in Vietnam, according to the Reshoring Institute, a nonprofit that supports expanded U.S. manufacturing.
And tariffs are expected to hike production costs for many domestic manufacturers, since companies will need to pay more for inputs shipped in from other countries.
That could leave manufacturers increasingly turning toward automation to trim costs.
'If you need to pay anyone you employ as a factory worker an average of $36 an hour with benefits, then you are inclined to hire very few of them and instead buy automated equipment and robots,' said Farok Contractor, a professor at Rutgers' management and global business department.
Winton of Winton Machine said she's already seeing an increased demand for automation from her company, which designs and produces factory automation for manufacturers in HVAC, aerospace, construction and other industries.
Winton still expects to see jobs created if manufacturing gets a boost through tariffs. She just believes automation will allow fewer, high-quality positions as opposed to a large influx of manual labor.
Already, manufacturing is relying on more college-educated workers; nearly 32% of civilian manufacturing workers had at least a bachelor's degree in 2023, up from 22% in 2006, according to a USA TODAY analysis of the Census Bureau's American Community Survey data.
'I need the people to build all the parts and pieces and the engineers to design and the software to build this factory automation,' Winton said. 'I think we have the people. Do we have the skillset? That's the question.'
This article originally appeared on USA TODAY: Is America ready for a manufacturing revival?