David Uberti

They have been forced to import more steel because of tariffs.

There's actually a dearth of US-made steel that they need to produce the wire that's used to reinforce concrete in highways and bridges.

That's holding back some of their ability to grow.

At the same time, another auto parts manufacturer I spoke with called NN, they have said that the increased costs that have stemmed in part because of tariffs on steel and aluminum have compressed their margins and left them with less money to actually invest in new manufacturing in the US.

And elsewhere.

So if you sort of add that up and multiply that across the hundreds, if not thousands of different manufacturers in the sector, you see some pressure, at least in the short term, from these import taxes.

Well, I'd say there's two macro factors at play.

First and foremost is China and the growth of China into a manufacturing powerhouse.

The series of trade wars the Trump administration has launched either on China or related to various trade imbalances around the world, they have not stemmed the tide of exports from China.

countries such as China or other countries in South and Southeast Asia, they are still pumping out record numbers of exports despite some of these trade barriers.

And that's putting downward pressure on prices for some of the products that US manufacturers are trying to sell abroad.

That's number one.

Number two is there is sort of a difference between manufacturing output

and manufacturing employment.

Those things are overlapped, but the Venn diagram is not a circle.

And while President Trump has staked a lot of his economic agenda on bringing manufacturing jobs back, hopefully revitalizing some of the industrial heartland

of the country, it's probable that a lot of the companies that are making investments in manufacturing right now will do so in ways that just use fewer workers.

The advancements made in software, AI, and robotics over the last couple of years have been immense.

And a lot of the companies that we are speaking to and say that they are actually taking advantage of some of the recent tax breaks for new investment in businesses to become more efficient, basically to be able to pump out more stuff with fewer people.

And over the course of time, that will have a downward impact on manufacturing employment, even as output might stay stagnant, if not go up.