Trump's tariffs were supposed to help manufacturers. But instead,
they're hurting
[March 18, 2026] By
JOSH BOAK
WASHINGTON (AP) — Jay Allen is a fan of President Donald Trump, and
voted for him on the belief that the Republican would cut taxes and trim
regulations, helping his manufacturing business in northeast Arkansas.
But the tariffs at the core of Trump's economic agenda have wreaked
havoc on his company, Allen Engineering Corp., which makes industrial
equipment used to install, finish and pave concrete. The import taxes
have raised the costs of engines, steel, gearboxes and clutches made
abroad that Allen needs to build power trowels that can sell for up to
$100,000 each.
Allen’s experience embodies a growing body of evidence that the tariffs
that Trump said would help American factories are, in fact, squashing
many of them. The problem could get worse as the administration
scrambles to craft new tariffs to replace the emergency import taxes
that the Supreme Court ruled illegal in February.
Allen said he ran his company at a loss in 2025 because of tariffs. His
payroll has fallen to 140 workers from a peak of 205. To get by this
year, he has hiked prices by 8% to 10%, even though that might mean
fewer sales.
“What’s really sad is the unintended consequences of his tariffs are
hurting manufacturing in our country,” said Allen. “Unfortunately, the
working-class people are getting squeezed.”
Manufacturing jobs have declined during Trump’s first year back
Trump’s core rationale for tariffs has been that they would force more
factories to open in the U.S. and would generate enough revenue to close
federal budget deficits. But that hasn’t materialized so far.
Factories continue to shed workers, with 98,000 manufacturing jobs lost
during Trump’s first full 12 months back in the White House. American
companies that foot the bill for tariffs are now suing the Trump
administration for more than $130 billion in tariff refunds. Meanwhile,
the federal deficit is projected to climb over the next decade.
The White House maintains that construction spending is high, more
workers are being hired to build factories, new investments are being
made and labor productivity in manufacturing is increasing — which could
eventually fuel a factory revival.
“It takes time to get production online, and therefore it will be some
more time before we fully materialize the benefits of the president’s
policies,” Pierre Yared, the acting chairman of the White House Council
of Economic Advisers, said in an email.
Construction is up — but that’s due to Biden’s bill
Some of the bright spots in construction cited by the White House appear
to be the result of programs launched by Joe Biden.
Factory construction spending began to accelerate in 2022 with the
anticipation of government support from Biden’s CHIPS and Science Act,
which included big subsidies for computer chip plants. The law was a
primary contributor to a historic surge in the annualized rate of
construction spending on manufacturing facilities, said Skanda Amarnath,
executive director of the economic policy group Employ America.
Construction spending on factories has slipped during Trump’s
presidency, but the pace remains relatively high largely because of
continuing work on Biden-era projects in Arizona, Texas and Idaho,
Amarnath said.
Amarnath has also gone through the interviews regional Federal Reserve
banks have held with businesses. Those comments show some companies
might expand by taking advantage of Trump's tax breaks on investments in
equipment and new buildings.
But while the pharmaceutical drug sector might be expanding, the
comments show no overall uptick in manufacturing because of Trump’s
tariffs.
“You don’t get the sense that there is this new manufacturing
renaissance under way,” Amarnath said.
Uncertainty in tariffs has deterred investments
Based on orders, proclamations and other statements, Trump has taken
more than 50 actions on tariffs so far — and that tally doesn’t include
the tariffs threats he regularly makes on social media or in
conversations with reporters, but hasn’t formally put in place.
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The main entrance to the Allen Engineering Corporation is seen
Monday, March 16, 2026, in Paragould, Ark. (AP Photo/Kevin Wurm)
 The flurry of announcements,
reversals, exemptions and legal challenges — as well as Trump’s
decision to bypass Congress to impose tariffs — has made it
difficult for smaller manufacturing companies to plan.
For example, Allen Engineering imports its 75-horsepower diesel
engines from Germany. Building them in the United States would
require a $20 million investment — a huge risk if the status of the
tariffs are unclear.
Are engine-makers “going to spend that kind of money to move
production from Germany to the U.S. when they don’t know what the
landscape is going to be in three years?” Allen said. “I don’t know
who is going to be in the White House, and what the stance is going
to be on these tariffs.”
Joseph Steinberg, an economist at the University of Toronto, said
research shows that under the best-case scenario “it would take a
decade for manufacturing employment to rise above where it was
before tariffs were enacted.”
But Steinberg said “the current situation is nothing like the ‘best
case,’” since U.S. trade policy is unsettled and that leaves
companies reluctant to expand.
Equipment makers have been hit hard by rising steel costs
About 98% of U.S. manufacturing establishments have fewer than 200
workers, according to Census Bureau data, and don’t have the kind of
name-brand recognition or lobbying heft to minimize the damage from
tariffs that big players like Apple, General Motors and Ford
possess.
The Association of Equipment Manufacturers in February reported that
America’s share of global manufacturing severely lags China's. The
group has urged tax credits to offset the expense of tariffs, and
specifically called for tariff relief on raw materials, parts and
components that cannot be acquired domestically at scale.
Steel tariffs have been a particular concern. Trump imposed them
last March and hiked them to 50% in June. They were not affected by
the Supreme Court decision.
Trump has credited the tariffs with restoring profits at American
steel mills. But they have hurt companies that use that steel, like
Calder Brothers in South Carolina, which makes equipment to pave
asphalt.
“The steel tariffs were the first thing that got my attention,” said
Glen Calder, the company’s president. “My steel pricing jumped 25%
two weeks before the tariffs went into effect for domestic steel.
The market price just jumped. It has stayed elevated.”
Meanwhile, China’s trade surplus has grown
Part of Trump’s push to expand manufacturing was to help American
companies compete against China — a country he plans to visit this
spring for talks with its leader, Xi Jinping.
But the U.S. manufacturing trade imbalance rose last year under
Trump instead of narrowing. Meanwhile, China’s trade surplus with
the world climbed to a record $1.2 trillion.
This trend exposes one of the big problems with Trump’s tariff
strategy, said Lori Wallach, director of the Rethink Trade program
at American Economic Liberties Project. She noted that he largely
bypassed Congress and failed to address gaps in the World Trade
Organization’s rules for the trade frameworks that he negotiated
with other countries.
Instead of working with partners to ensure there were penalties for
foreign manufacturers with abusive labor practices and unfair
subsidies, Trump chose against rallying partners to counter China as
a unified group. American manufacturers are at a disadvantage,
Wallach argued, because there is not a coalition of nations that can
impose penalties for currency manipulation, subsidies and schemes to
evade tariffs.
“The general revulsion of this administration to international
cooperation means they’re trying to do it alone,” Wallach said.
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