Although Donald Trump’s narrow victory over Democratic presidential nominee Kamala Harris in 2024 was far from the “landslide” he claims it was — he won the national popular vote by roughly 1.5 percent — his emphasis on inflation and the economy helped get him past the finish line. Trump blamed Harris and then-President Joe Biden for inflation, and his messaging worked: Three Rust Belt states that went to Biden in 2020 — Pennsylvania, Michigan and Wisconsin — went to Trump in 2024.
Many economists are warning, however, that Trump’s steep new tariffs could bring about inflation much worse than that of the Biden era. And according to Bloomberg News reporters Mark Niquette, Miranda Davis and Brooke Sutherland, they also threaten his promise to create manufacturing jobs in the Rust Belt and the Midwest.
In an article published by Bloomberg News on June 9 and republished by Financial Post that day, the journalists explain, “President Donald Trump’s signature trade policy is threatening to backfire by upending other top priorities: the revival of U.S. manufacturing and the American Rust Belt. In Illinois, Trump’s tariffs prompted a compressor maker to delay a key equipment purchase after an ambitious factory revamp. Rockwell Automation Inc., a Wisconsin-based producer of factory tools, says some manufacturers are putting projects on hold because of uncertainty over costs and future demand. Snap-on Inc. is seeing similar hesitancy among car mechanics.”
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The reporters continue, “The warnings underscore the rising worry that turbulence from Trump’s trade wars will smother the progress U.S. manufacturers have already made revving up American factories. Manufacturing payrolls fell by 8000 last month, the most this year, according to the Bureau of Labor Statistics. U.S. and Chinese negotiators will resume trade talks Monday in London, as the world’s two largest economies look to resolve disputes over tariffs and technology.”
According to Niquette, Davis and Sutherland, the “anxiety” over Trump’s tariffs may be “higher in the Midwest” than in other parts of the United States.
Gus Faucher, chief economist for PNC Financial Services Group in Pittsburgh, told Bloomberg News, “Overall, it is going to be a drag on the U.S. economy. In particular, it’s going to be a drag on the Midwestern economy.”
Trump is claiming that his tariffs will lead to a manufacturing renaissance in the U.S., but according to Niquette, Davis and Sutherland, they are having the opposite effect.
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“U.S. factory activity contracted for a third straight month in May, and every comment in the Institute for Supply Management’s sample of survey responses from manufacturing executives focused on tariffs — including a respondent in the electric equipment, appliance and components business who said the duties have created supply-chain disruptions rivaling those of the pandemic,” the Bloomberg reporters note. “The Midwestern states of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin lost almost 2 million manufacturing jobs between 1998 and 2010 as trade deals and China’s entrance into the World Trade Organization spurred companies to seek lower-cost labor and production outside the U.S.”
Niquette, Davis and Sutherland add, “In recent years, though, a cautious optimism had returned…. Since the start of 2021, the region has added over 100,000 factory jobs, according to federal data.”
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Read the full Bloomberg News article here (subscription required) or at this Financial Post link.
