Writing on Facebook, AEI economist Mark Perry points to evidence that the tariffs imposed by the Trump administration in April are not creating manufacturing jobs. (For those without access to Facebook, Mark’s chart is reproduced below. The solid red line indicates the date the tariffs were imposed.)
At first glance, this decline suggests that tariffs are not working to “bring back” jobs.
Some people object that this graph is deceptive. Truncating the Y-axis makes the decline appear worse than it actually is. This objection is beside the point. The trend is negative. Trump and others predicted that this trend would be positive. Tariffs were supposed to reverse this downward trend. they took a wrong turn.
A more reasonable objection is that it takes manufacturers longer to hire. Even after six months, there’s no particular reason to think we’ll suddenly see a surge in manufacturing employment. What will future hiring trends be like?
Fortunately, the Bureau of Labor Statistics makes that data publicly available. BLS publishes the Job Openings and Turnover Survey (JOLTS). The number of job openings (series IDJTS300000000000000JOL) is an indicator of future employment, as companies must post job openings before they can hire people.
Job openings have also decreased since the tariffs were imposed. Excluding the post-pandemic recovery period (2021-2022, when job openings and hiring numbers were unusually high as companies reopened after lockdowns), manufacturing jobs averaged 543,000 per month in 2023 and 2024. This means that for the past two years, approximately 500,000 manufacturing jobs were posted every month. These weren’t necessarily new job openings. Those were just unfulfilling jobs. BLS does not track how long job postings are posted. The number of job openings has averaged 410,000 since President Trump took office and the first tariffs went into effect in February. In other words, since the tariffs were imposed, there are about 130,000 fewer manufacturing jobs than there were before. A low number of job openings indicates that companies are slowing down hiring, rather than hiring more. (Note: These data are seasonally adjusted. In theory, there should be no seasonal variation.)
As The Wall Street Journal recently reported, China is simply shifting exports from the United States to other countries. U.S. tariffs have not done much to reduce China’s export share, and certainly have not helped increase U.S. exports. Indeed, these results indicate that the “optimal tariff model” that some members of the current administration, such as Peter Navarro, have invoked to justify tariffs is likely not applicable. The important point here is that U.S. tariffs do not appear to be improving U.S. manufacturing on a global scale.
Do these data prove that tariffs are failing? Not necessarily. Performing a causal analysis requires far more data, time, and research. But they show that tariffs are falling short of their (often contradictory) goals.
Why don’t tariffs achieve these goals? In theory, jobs should move to industries protected by tariffs. If these tariffs protect manufacturing industries, why aren’t jobs moving there?
The argument for tariffs to protect manufacturing is based on the assumption that what is imported is the final product, and that the protectorate has tariff-free access to intermediate goods (goods used in manufacturing). In 21st century America, that assumption no longer holds true. According to Doug Irwin, a trade economist at Dartmouth College, about 75% of US imports are these intermediate goods (Free Trade Under Fire (5th ed) Table 1.1, pg 14). This means that tariffs will increase the cost of manufacturing in the United States, making U.S. manufacturing less competitive with foreign imports and the world market. Irwin explains:
“Any trade restriction that increases the price of an intermediate good raises the production costs of downstream user industries and adversely affects employment in those industries. In other words, when domestic firms have to pay a premium for production inputs, especially when competing with foreign rivals who do not pay those taxes, employment in those industries suffers.” (ibid., p. 100, emphasis added).
But let’s be ironclad and think about what other factors could cause a similar pattern.
First, these tariffs face legal challenges. As of this writing, legal challenges to the tariffs are before the Supreme Court (Trump v. VOS Selection, Learning Resources v. Trump and Consolidation). These lawsuits have been ongoing since the spring, with the first challenge filed in April 2025 in the U.S. Court of International Trade. Given the cost of hiring, companies may be reluctant to hire while this case is pending. If a resolution favorable to President Trump on tariffs passes, there could be a bumper crop of jobs. The big problem I see with this argument is that many of the VOS plaintiffs are the manufacturers themselves. It is strange that they are arguing against tariffs, and if tariffs are maintained they will only start hiring.
There may be other reasonable arguments, but I can’t think of any (if you have any ideas, please share them in the comments).
