Trump tariffs slam the brakes on US job growth

The US labor market encountered stagnant growth after companies, facing trade challenges, began cutting back on hiring and, in several instances, laying off workers. Business executives greatly attributed Trump’s threatening tariff policies to be the root cause of the situation, resulting in higher costs and a barrier to expansion plans.

Among the industries affected were manufacturing, wholesale and retail, and the energy sector. Julie Robbins, the CEO and co-owner of EarthQuaker Devices, a guitar pedal manufacturer based in Akron, Ohio, commented on the topic of discussion.

According to Robbins, these tariff policies have dragged behind the process of manufacturing industries and reduced the advantages manufacturers like her enjoyed earlier. She referred to the tariffs as unexpected taxes and obstacles to the industry’s hiring and growth.

The US job market declines amid Trump’s threatening tariff policies

Robbins described her business strategy before the imposition of Trump’s tariff policies. According to her, she would normally want to hire around three to four more workers for her work group of 35 members; however, since Trump’s tariff policies took effect, Robbins’ company is now operating effectively on a hiring freeze.

In a statement, the manufacturer mentioned that they cannot hire more workers or expand their businesses unless stability in policy and predictability in costs are ensured. She added that they were currently forced to operate in an unpredictable, tough environment.

This decline in the job market has prompted economists to anticipate that the US Federal Reserve will reduce interest rates for the first time in 2025 next week. 

Concerning this situation, Jerome Powell, the United States Federal Reserve Chairman, pointed out that slowing job growth might lessen the inflationary impacts of Trump’s tariff policies.

Meanwhile, reliable sources reveal that August’s poor job reports resulted from the effects of Trump’s tariffs on the production sector. Based on the report, the US economy’s hiring drastically decreased with the addition of only 22,000 jobs.

To break down the losses encountered in the job market in 2025, the manufacturing sector was significantly hit with a loss of 12,000 jobs, accounting for 78,000 of the total losses, and the mining sector, which includes gas and oil, faced a loss of 6,000 jobs. Additionally, the wholesale trade sector’s employment rate decreased by 32,000.

In August, industrial executive John Deere complained that these tariffs had cost them $300 million and were likely to double by the end of the year.

However, the Bureau of Labor Statistics has stated that the job market decrease was observed earlier, even before Trump took office. Based on their data, there were one million fewer jobs available than in March last year.

Despite the ongoing challenges, the Trump administration claims these tariffs encourage US firms to invest more in their operations to bring back production. According to their argument, this will soon lead to a significant boost in employment.

Industry leaders encounter hardship in their operations amid economic uncertainties 

Scott Bessent, a United States Secretary of the Treasury, also commented on the topic of discussion. According to Bessent, “For every John Deere, we have companies telling us, ‘The tariffs have benefited our business, we’re boosting our capital expenditures and planning to hire more workers.”

His statement contradicts the reports from some industry leaders. According to them,  they fear hiring more workers because of economic uncertainties affecting their operations.

An example of these industry leaders is Traci Tapani, the CEO of Wyoming Machine, a metal fabrication firm. Tapani stated that she has encountered hardship in operating her company due to the fast changes in tariffs and the back-and-forth nature of things.

She further highlighted that this situation has triggered them to apply a strategy whereby they do not replace workers who leave the company. Notably, most of the industries affected are those that US President Donald Trump pledged to revive during his campaign.

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