U.S. manufacturing is entering a strong recovery thanks to President Donald Trump’s two-pronged approach to using tariffs and tax incentives to stimulate economic growth, with a key manufacturing survey revealing that manufacturing industry employment expanded in July for the first time in 33 months.
The latest Institute for Supply Management report for July reveals that the Employment Index, which tracks employment across the U.S. manufacturing industry, rose 3.1 percentage points compared to June, which places the index in “expansion territory” for the first time since November 2023.
This rise into expansion territory for the employment index is a strong positive signal that domestic manufacturing isn’t only expanding in terms of production, but demand has reached such a volume that employment is expanding to meet that demand for the first time in close to three years.
President Trump made revitalizing the U.S. manufacturing sector through his two-pronged approach — which involves tariffs on foreign goods and the passing of the Working Families Tax Cuts — the cornerstone of his 2024 campaign.
The administration’s approach is paying off, with the Institute for Supply Management’s manufacturing PMI continuing to expand for the seventh consecutive month, and the employment index entering expansion territory for the first time in 33 months. American workers and consumers are the beneficiaries.
The Institute for Supply Management’s manufacturing PMI rose 2.3 percentage points above the June number, reaching 55.6 percent in July. This is the seventh consecutive month of growth for the index, and the highest recording of the index since May 2022.
The July report notes that a consistent PMI reading above 47.5 percent represents expansion in manufacturing, and the index has been expanding well above that figure for several months now.
The report notes that across multiple measures, U.S. manufacturing is growing — from production and raw materials to employment across industries. According to the report, the new orders index rose for the seventh consecutive month in July, climbing 0.7 percentage points since June. The production index maintained its “expansion” reading, and the backlog of orders index rose a full 4.5 percentage points in July.
Tax cuts are a massive reason why manufacturing is able to expand. A recent report from the National Association of Manufacturers revealed that the Working Families Tax Cuts signed into law by President Trump last year have saved six million jobs and preserved $540 billion in wages across all fifty states.
The Treasury Department also estimates that the tax cuts have reduced taxes for over 12 million small-business owners by roughly $7,000 each.
The manufacturing boom is in full swing under President Donald Trump, spanning multiple critical industries. New jobs are being created in the aerospace, automobile, aluminum, electronics and chips, pharmaceutical, textile, and tin industries, as well as many others.
In early August, Octapharma, a Swiss pharmaceutical company with locations in Austria, France, Germany, and Sweden, announced its first U.S. biopharmaceutical manufacturing location in South Carolina. The company is investing $1.5 billion to build its facility, promising to bring 1,500 jobs to South Carolina.
In July, a Mexican aluminum manufacturing company, Zerluma, broke ground on its $50 million aluminum recycling and manufacturing facility in Mission, Texas. The project is expected to bring 70 jobs to the Mission region and expand as production rises.
In July, Taiwanese chipmaker TSMC announced an additional $100 billion investment to produce semiconductors in Arizona. This brings TSMC’s investment to $265 billion to create 12 facilities in the United States.
In March, German engineering company Siemens announced its $165 million investment in the U.S. to expand into AI infrastructure on American soil. The investment adds to an existing investment of nearly $700 million Siemens has dedicated to expanding its U.S. manufacturing footprint, creating jobs across facilities in California and Texas.
Month after month, the Trump Administration is delivering on its promise to bolster the U.S. manufacturing industry by encouraging domestic production, and it is working. Through strategic use of tariffs and favorable tax policies, President Trump is making it more profitable for companies to produce critical products in the United States.
Many foreign companies, like TSMC, Octapharma, and Zerluma, have decided to do business on U.S. soil rather than simply trade with the U.S. and face tariffs. Domestic manufacturing is picking up across multiple measures, and in July, for the first time in 33 months, the manufacturing employment index entered expansion territory — indicating production is rising, demand is rising, and jobs are being created.
Manzanita Miller is the senior political analyst at Americans for Limited Government Foundation.
