With the new August 1 tariffs and next Tuesday’s first half 2025 trade data release, we prepared this memo with the manufacturing indicators and trade data for Trump’s first six months, which show the trends of a bigger deficit and manufacturing decline are the opposite of what Trump promised.  View the memo online at Rethink Trade to see embedded charts/tables of trade and manufacturing data.

American Manufacturing Indicators Are Down While Six-Month 2025 Trade Data to Be Released on August 5 Will Show Big Trade Deficit Increase

Washington, D.C. — Candidate Donald Trump rode the working-class vote back into the White House with promises that tariffs would rebalance U.S. trade and rebuild American manufacturing. His presidential trade policy announcements since, including the April 2 “Liberation Day” tariffs, reiterated his goal was boosting American manufacturing and reducing the U.S. trade deficit.

When the U.S. Census Bureau releases the June 2025 trade data on August 5, they will show a significant increase in the U.S. trade deficit in the first half of Trump’s first year back in office compared to the first six months of 2024—or to the last six months of 2024. Measures of manufacturing activity also show across-the-board declines.

“The data show President Trump not only has failed to deliver on his promises to cut the trade deficit and revitalize American manufacturing but that the situation has worsened in his first six months as the trade deficit grew and manufacturing declined,” said Lori Wallach, director of Rethink Trade. “So far, Trump’s trade deals seem to prioritize the demands of Big Tech, Big Oil, and the other usual beneficiaries of decades of failed U.S. trade policy instead of fixing the root causes of our huge trade deficit to help the American manufacturing workers and firms as he promised to do.”

The manufacturing indicators’ decline undercuts administration efforts to explain away the growing U.S. trade deficit as being caused only by a fluky jump in imports as companies try to build inventory in advance of Trump’s stated tariff deadlines. Rather, manufacturing and trade data together show trade and manufacturing outcomes trending opposite of what Trump promised.

Background Data:

• American Manufacturing Employment Has Declined by 10,000 Jobs During the Past Six Months: Manufacturing employment declined to 12,750,000 employees in June 2025, according to the U.S. Bureau of Labor Statistics. This count is down 10,000 from the December 2024 count of 12,760,000 employees, and down 89,000 from 12,839,000 American manufacturing employees in June 2024. Manufacturing employment rose slightly from 12,755,000 in January 2025 to 12,764,000 employees in April 2025, and then fell in May and June 2025 to the current level.

• U.S. Manufacturing Decline Revealed in Steady Purchasing Managers Index (PMI) Drop Since February 2025: The U.S. manufacturing PMI has been steadily declining. A PMI above 50 points indicates the manufacturing economy is expanding while a PMI below 50 points indicates the manufacturing economy is declining. The index reached 50.9 points in February of this year, fell to 50.3 points in March, and declined further in April, May, and June 2025, according to Investing.com. Prior to 2025, the index was most recently over 50 points in April 2024.

• American Manufacturing Activity Declined by $202.3 Million in First Six Months of 2025 Compared to First Half of 2024, U.S. Census Data Show: The decline in the U.S. Census Bureau’s “Manufacturers’ Shipments, Inventories, and Orders” data, specifically the “American Manufacturers’ New Orders for Nondefense Capital Goods (Excluding Aircraft)” data, is considered an indicator of slowing manufacturing activity. This data cut captures both equipment and inputs/supply chain purchases. After a slight quarter-over-quarter increase from Q4 2024 to Q1 2025, these capital goods orders fell to $224 billion in Q2 2025, according to the U.S. Census Bureau. Capital goods orders in the first half of 2025 were $450.044 billion. Adjusted for inflation, this is down from $502.9 billion in the first half of 2022, $470.7 billion in the first half of 2023, and $450.247 billion in the first half of 2024.

• U.S. Overall Goods and Services Trade Deficit Was 47%—$165 Billion—Larger in First Five Months of 2025 than First Five Months of 2024: Before the full six-month trade data become available on August 5, we can see from the first five months of Trump’s second term that the trade gap widened significantly as imports jumped in January, February, and March. Imports in Q1 2025 were $197.8 billion higher than in Q1 2024 (inflation-adjusted), while exports were only $13.5 billion higher in Q1 2025 than in Q1 2024. Imports fell from over $400 billion in March 2025 to $347 billion in April and May. The five-month 2025 goods and services trade deficit is 47% higher than the same five months in 2024.

• Increase in U.S. Imports in Q1 2025 Drove the Trade Deficit Increase: The U.S. goods and services trade deficit widened due to increased imports in January, February, and March 2025.

• U.S. Trade Deficit in Manufactured Goods Was $174.6 Billion Higher in First Five Months of 2025 than First Five Months of 2024: Manufactured goods imports increased significantly in the first quarter of 2025, reaching a monthly total of over $300 billion for the first time in March 2025 (inflation-adjusted), according to the U.S. Census Bureau. The five-month 2025 manufactured goods trade deficit is nearly 30% higher than the same five months in 2024.

• The U.S. Trade Deficit Continues to Grow as United States Imports More from Countries Besides China: As has been the trend since 2019, the decline in imports from China is being swamped by growing imports from other countries, which lead to an overall larger U.S. trade deficit. Chinese investment in countries like Vietnam and Mexico has created a workaround with Chinese firms able to reach U.S. markets and benefit from the trade terms these countries have with the United States.

• U.S. Construction Spending in Manufacturing Is Down $70.25 Billion Comparing First Six Months of 2024 to First Six Months of 2025: After peaking at $726.4 billion (adjusted for inflation) in Q3 2024, U.S. construction spending in manufacturing declined to $686.3 billion in Q1 2025 and $673.6 billion in Q2 2025, according to the Federal Reserve Bank of St. Louis. Construction spending skyrocketed in 2022 and 2023 after the Infrastructure Investment and Jobs Act was signed into law in November 2021 and the Chips and Science Act and Inflation Reduction Act were signed into law in August 2022. Quarterly construction spending in manufacturing increased by nearly $402 billion from Q4 2021 to Q4 2024. Spending on manufacturing construction, which includes new factories and expanding or updating existing facilities, is now stagnating.

These data paint a stark picture of U.S. trade and manufacturing heading in the opposite direction of what Trump promised. No administration can quickly turn around decades of U.S. trade deficits and deindustrialization. But it is notable that every manufacturing and trade balance indicator shows worsening outcomes. And, to date, the trade “agreements” the administration has announced do not include terms designed to change the underlying causes of surging imports from the countries that are the main source of imbalance. Very little detail is available—perhaps very little is agreed—for the various deals that have been announced thus far. But at a high level, these deals do not meet the criteria that would be beneficial in addressing the U.S. trade deficit and deindustrialization. 

Learn more about Rethink Trade here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.