The stock market is struggling to adapt to President Trump’s aggressive tariffs. Economists are downgrading their growth forecasts. Some are predicting a recession. Voters are souring on Trump’s handling of the economy, just two months into his second presidential term.
With all the churn, it’s worth asking: What is this all about, anyway? Why is Trump doing this? Is it worth the trouble?
Read more: What Trump’s tariffs mean for the economy and your wallet
Trump has offered a variety of rationales for the tariffs he has imposed on… well, the latest count is thousands of imported products from dozens of countries. Trump wants trade partners to help stem the flow of migrants and fentanyl into the United States. He wants more federal revenue from tariffs. He wants to punish nations that have put more limits on buying US products than the United States has put on theirs.
But there’s one overriding Trump aim: to beef up domestic manufacturing and add more blue-collar jobs. “We’ll impose new tariffs so that the products on our stores will once again be stamped with those beautiful words, made in the USA,” Trump said in a January speech previewing his second term. He highlighted more domestic production of cars, lumber, ships, and many other things as hallmarks of his new “golden age” in America.
Manufacturing is important, but it’s not where you’d likely start in a clean-sheet effort to turbocharge the US economy. Manufacturing accounts for just 10% of GDP, a portion that has gradually declined since the 1980s. We still build a lot of stuff in America. Industrial output is close to record highs. But manufacturing requires fewer and fewer workers, for obvious reasons.
Producers continually adopt automation and manufacturing gets more efficient. It is true that some manufacturing capacity has left the United States for overseas markets, contributing to the loss of blue-collar jobs. But if that work had stayed, the same efficiency forces would have applied and the nation would have continued to make more stuff with fewer workers.
This trend is very familiar. Agriculture used to employ a majority of Americans, but the industrialization of the economy in the 1800s and 1900s changed that. The farm economy today accounts for just 1.2% of all jobs. And thanks to massive efficiency gains, those workers provide plenty of food for the US market, as well as for export.
Trump’s tariff plan is basically an effort to push the US economy back in time, like somebody in the middle of the Industrial Revolution agitating to keep all the workers on farms. “The problem is that it isn’t the 1950s or 1960s anymore,” Douglas Holtz-Eakin, former director of the Congressional Budget Office and head of the American Action Forum think tank, explained in a recent blog post. “Manufacturing jobs have been declining for generations from a complex set of forces that cannot be offset by a simplistic reliance on tariffs. There are no jobs to ‘bring back.’”
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This is not to pretend that nothing is wrong. The decline in blue-collar employment has, in fact, ravaged some communities once reliant upon it. A prominent group of economists has thoroughly documented the “China shock” — the migration of US manufacturing jobs to China over a period of some two decades — and the degradation of living standards for millions of blue-collar Americans.
The globalization of trade brought advantages, including low prices for many goods and a booming corporate sector that enriched the investor class. But US policymakers never had a good answer for how to take care of displaced blue-collar workers. Trump exploited that failure when he ran for president in 2016 and appealed to the “forgotten men and women of America.” The pitch worked again in 2024, a time when three years of high inflation had eroded living standards even more.
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But the strength of the US economy is no longer in manufacturing, no matter what Trump does. It’s in services and technology. Most of the jobs in the US economy are in services these days, and that’s where almost all of the future growth will come from. Almost anybody looking for a stable career would be better off in a sector that’s vibrant because of underlying demand than in one propped up by an arbitrary presidential policy the next guy who comes into office could promptly cancel.
Analog man: U.S. President Donald Trump speaks to the media during a guided tour of the John F. Kennedy Center for the Performing Arts on March 17, 2025, in Washington, D.C. (Chip Somodevilla/Getty Images) ·Chip Somodevilla via Getty Images
There should be good jobs for people who forego college, but why do they have to be in manufacturing? The Labor Dept. says the three fastest-growing jobs of the next 10 years will be windturbine technicians (average pay: $61,770 per year), solar panel installers ($48,800 per year), and nurse practitioners ($126,260 per year). Those are all service jobs. Other non-college jobs among the top 20: veterinary assistants ($36,440), personal care aides ($33,530), veterinary technologists ($43,740), and logisticians ($79,400).
There’s a well-known need for more skilled tradespeople such as electricians, carpenters, framers, plumbers, and welders. The ever-growing healthcare sector needs all manner of technicians. Good salespeople are always valuable because they generate revenue. Coding schools now allow people to learn digital skills at a fraction of the cost or time of a college education.
These are jobs that already exist. No president has to “bring them back.” Getting the required skills isn’t necessarily easy, but neither is manufacturing these days. It often requires specialized training needed to operate complex machinery, not to mention routine drug testing for safety and liability reasons.
Most economists think Trump’s use of tariffs to revitalize manufacturing will be self-defeating, because the higher prices that protect some domestic industries will damage others by raising their costs. But even if Trump’s plan did boost overall manufacturing output and employment, it would be an effort focused on just one-tenth of the economy, at best.
Trump, of course, is a 78-year-old creature of the 20th century, when smokestacks were a sign of progress and most things were analog. Tariffs seem to make sense to him because they apply to stuff that comes out of factories.
Most of America’s output doesn’t come from an assembly line, however, and Trump won’t change that.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
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