The American industries most exposed to trade turmoil have slammed the brakes on hiring and in many cases begun to lay off workers, causing growth in the US labour market to grind to a halt.
Sectors including manufacturing, wholesale retail and energy have experienced a wave of job losses in recent months that executives blame in large part on President Donald Trump’s sweeping levies that have increased costs and made it difficult to commit to expansion plans.
“These tariffs are just a drain on American manufacturers like mine. There’s no benefit. It’s an abrupt tax that is impeding our ability to hire and grow,” said Julie Robbins, chief executive of EarthQuaker Devices, a manufacturer of guitar pedals in Akron, Ohio.
Robbins said to keep up with demand she would ideally have added another three or four employees to EarthQuaker’s 35-person workforce. Instead, the company had entered an effective hiring freeze, she said.
“We can’t hire or grow without having stability in policy and predictability in expenses. And now we’re being forced to exist in an uncertain environment. It’s really challenging.”
The souring jobs market has raised economists’ expectations that the US Federal Reserve will next week cut interest rates for the first time this year. Fed chair Jay Powell said last month that slowing jobs growth could offset the inflationary impact of Trump’s sweeping tariffs regime.
Goods-producing sectors exposed to Trump’s tariffs led the decline in last week’s bleak August jobs report, which showed the US economy added just 22,000 jobs as hiring slowed to a trickle.
Manufacturing shed 12,000 jobs, bringing total losses to 78,000 this year. The mining sector, which includes oil and gas, lost 6,000 jobs in August, while employment in wholesale trade has fallen by 32,000 this year.
Last month, industrial giant John Deere said tariffs had cost it $300mn in 2025, a price tag that would probably double by the end of the year.
The company laid off 238 workers across factories in Illinois and Iowa as it said net income fell 26 per cent in the third quarter versus the same period last year.
Data released this week by the Bureau of Labor Statistics suggested the labour market had probably begun to slow sharply before Trump retook office, with almost 1mn fewer jobs in circulation than previously thought in the year to March.
The Trump administration has argued that tariffs are already spurring companies’ capital investment plans for the US as they look to reshore operations and that an employment surge will follow.
Treasury secretary Scott Bessent said: “For every John Deere we have companies who are telling us: ‘The tariffs have helped our business, we’re increasing capex and we’re going to increase employment’.”
But some executives told the Financial Times they were taking a wait-and-see approach to hiring because of the economic uncertainty.
“The speed at which the tariffs are changing, and things are going back and forth, and this uncertainty is making it very difficult to do business,” said Traci Tapani, chief executive of Wyoming Machine, a metal fabrication company. “A strategy that we’re trying to employ here is when someone leaves the company, we don’t replace them.”
Many of the sectors that have been caught up in the trade turmoil are those that the president vowed on the campaign trail to rejuvenate.
“Manufacturing isn’t a labour supply story, it’s slowing demand and being the victim of a rapid policy shift that still hasn’t resolved yet,” said Michael Madowitz, principal economist at the Roosevelt Institute.
The US oil industry, a big financial donor to Trump, has also been hit hard by tariffs — which have dented revenues and raised costs for steel and equipment — adding to the pressure from falling crude prices.
At least 4,000 people have left the industry since January, according to the BLS, the fastest pace of job losses since the Covid-19 pandemic in January 2021. Thousands more lay-offs are planned following high-profile announcements from US oil companies Chevron and ConocoPhillips, which are slashing up to 8,000 and 3,250 jobs, respectively.
“It’s pretty scary right now and the outlook for next year, according to the banks, is going to be much worse,” said Elliott Doyle, a Texas oilman who owns interests in leases and non-operating wells in the Permian, the largest oilfield in the US, as well as several other areas.
“Companies are really preparing for the downturn. That is why we are seeing lay-offs.”
Dozens of smaller shale producers and oil services companies are also making people redundant in a blow to an industry that was expected to flourish under Trump.
“Tariffs are just causing uncertainty. It’s harder for oil and gas CEOs to make decisions on their capex decisions now,” said Bryan Sheffield, a Texas oilman and managing partner of Formentera, a private equity group that owns US shale assets.
But some executives remained upbeat, arguing that tariffs would ultimately help to restore domestic industry.
Michelle Feinberg, founder of fashion contract manufacturer New York Embroidery Studio, said she was planning reductions in her workforce of about 300 in the near future and automating processes “just to stay competitive”.
But she was nonetheless broadly supportive of tariffs and other policies that she said had been put in place to help domestic manufacturers.
“We decided too long ago that we don’t want to make things as a country and we’re paying the price for that now.”
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