Can Trump Turn Back the Clock on U.S. Manufacturing?

One of the stated goals of the Trump administration’s tariff offensive is to bring back manufacturing jobs to the United States. But is that possible or even desirable in this day and age, when the vast majority of American workers have long moved on from manual labor towards knowledge-based jobs in the service sector? Recent surveys have shown that Americans have little interest in returning to factory jobs and even if they had, their wage demands would make it impossible for U.S. companies to be profitable.

While it’s important to keep some manufacturing in the country to maintain its industrial base, especially in high tech sectors and industries related to defense, turning back the clock on mass manufacturing of anything from textiles to consumer tech products seems like a step backwards. After all, the United States has profited from cheap overseas labor for decades, as it helped American companies maximize their profits while keeping the price of consumer goods down. Moreover, outsourcing manufacturing has enabled the country and its workers to move on from low-wage manual labor to better paid jobs in the country’s blossoming service sector.

Economic history has shown that, as a country develops, so does its service sector. This is certainly true for the United States, one of the most highly developed countries in the world and certainly a service economy. According to the U.S. Bureau of Labor Statistics, private service-providing jobs account for more than 70 percent of nonfarm payrolls in the country, while goods-producing jobs account for less than 15 percent of jobs.

As our chart shows, the share of manufacturing jobs in total employment in the U.S. gradually fell from more than 30 percent in 1950 to just 8 percent in 2024. Interestingly, manufacturing has stabilized at this low level, with the share of total employment declining from 8.9 to 8.0 percent between 2010 and 2024, after falling from almost 15 to 8.9 percent in the previous 15 years. At the end of last year, there were 12.8 million manufacturing jobs in the U.S. compared to 114 million private service-providing jobs.

There are two main reasons for this long-term shift: productivity gains and globalization. As capital and goods began flowing freely across borders, it became cheaper to produce goods in parts of the world with lower labor costs and import them. This is how the United States gradually moved away from producing goods and how China became the world’s manufacturing hub, making anything from smartphones to television sets.