With Trump’s “Liberation Day” tariffs declared on 2nd April and then paused for 90 days a week later, countries are negotiating trade deals with the US, and for all we know, Trump may succeed in having countries import more from the American market. This works towards his promise of a “manufacturing renaissance” in America. However, there have been and continue to be debates about the viability of growing the American manufacturing sector.
Over the last 50 years, the manufacturing sector’s contribution to GDP has shrunk by 15% , and manufacturing employment has fallen by 0.6% per year for a decade. This can be attributed to many factors, such as the financial crisis and a general attitude in which the US invested in domestic R&D but shifted production outside the US, where wages were the lowest. Suzanne Berger, a political scientist at MIT, referred to this as the Apple Model. This slowly led the US economy towards a service-based economy.
However, the American government has identified this problem and has taken measures such as imposing tariffs and increasing investment in the manufacturing sector. And these have paid off, with 750,000 new jobs created between 2021 and 2024 and top executives focusing on reshoring activities. These activities contribute to and show the strengthening of the US manufacturing sector. This is also backed by companies such as Nvidia, Hyundai, Apple, GE Aerospace, Eli Lilly, and Taiwan Semiconductor Manufacturing Company, increasing their investment and manufacturing in the US market. The manufacturing industry is said to create 3.8 million new jobs by 2033.
The above hints at the claims that the US manufacturing sector’s demise is “greatly exaggerated—if not entirely fictitious”. Now that we understand that the US does have the potential to increase manufacturing, it must be understood that the manufacturing jobs will not look like the previous factory-floor manufacturing jobs, this time around. It would be more automated and flexible, and create new kinds of blue-collar jobs. The new jobs will require more STEM skills and programming knowledge3. The government would have to invest in upskilling the next generation of employees working these manufacturing jobs. On the other hand, Gen-Z is not the generation that is looking forward to these blue-collar jobs in the factory or manufacturing sector. While Gen-Z is turning to blue-collar jobs, such as plumbing, because it allows them to be their boss and pays better than the average $51,890 per year salary (against the average American salary of $66,600). Another factor is that Gen-Z believe that these jobs are not safe and do not offer flexibility, the two “non-negotiables” for the population.
So, Trump may very well be able to swing manufacturing in America, but he would also have to keep in mind the required upskilling that would be needed and present the jobs in a fashion that would attract Gen Z to pursue them.