As Elon Musk reveals he tried to convince President Donald Trump not to implement sweeping tariffs, U.S. Manufacturers are linking the levies with industry troubles.
In an interview with investor and entrepreneur Nikhil Kamath released on Sunday, Musk said he warned Trump against tariffs, arguing they “create distortions in markets.” The Tesla CEO has previously expressed concern that import taxes would cause a recession and drive up the prices of goods. In April, the EV maker stopped taking orders for some models in China, which then faced a retaliatory 125% tariff.
“The president has made it clear he loves tariffs,” Musk said in the interview. “I’ve tried to dissuade him from this point of view, but unsuccessfully.”
“Would you want tariffs between you and everyone else at an individual level? That would make life very difficult,” he continued. “Would you want tariffs between each city? No, that would be very annoying. Would you want tariffs between each state within the United States? No, that would be disastrous for the economy. So then, why do you want tariffs between countries?”
The White House didn’t immediately respond to Coins2Day’s request for comment.
Beyond the levies threatening Musk’s own company, American manufacturers are now linking Trump’s tariffs to the shrinking industry and tough labor cuts they’ve needed to make to keep their businesses going. It’s the opposite of Trump’s intentions when implementing the tariffs, which he claimed would be a catalyst for reshoring American factory jobs.
U.S. Manufacturing contracted in November for the ninth consecutive month, according to the Institute for Supply Management (ISM) Manufacturing PMI report released on Monday, with pullbacks in new orders and supplier deliveries, as well as employment. Some manufacturing industry personnel surveyed attributed slowing business and tightening labor to the levies, even saying they’ve increased overseas production.
“We are starting to institute more permanent changes due to the tariff environment,” one survey respondent in the transportation equipment industry said, per the report. “This includes reduction of staff, new guidance to shareholders, and development of additional offshore manufacturing that would have otherwise been for U.S. Export.”
Tariff-induced labor woes
Recent jobs data has confirmed some manufacturers’ concerns. The U.S. Bureau of Labor Statistics’ jobs report last month showed there were 6,000 fewer manufacturing jobs in October, despite nonfarm payrolls increasing by 119,000. The slip in factory roles have brought the tally of lost manufacturing jobs since Trump’s April tariff push to 59,000, according to the data.
Laura Ullrich, director of economic research at the Indeed Hiring Lab, told Coins2Day the shrinking manufacturing sector is, in part, a result of tariffs disproportionately hitting intermediate goods, which are products used in the process of creating a finished good. This can hike up production costs, forcing companies to slash headcount. Pantheon Macroeconomics analysts Samuel Tombs and Oliver Allen similarly said in September that shrinking wage growth was a result of tariff-hit companies trying to maintain margins amid rising input costs.
Ullrich also noted trade uncertainty more broadly forces companies to think less about hiring and more about sourcing decisions and pricing.
“It is striking how soft manufacturing has been because, in theory, you put tariffs in place to protect domestic manufacturing, so that domestic manufacturing employment grows,” Ullrich said. “And we have seen the opposite of that.”
Despite warming trade relations between the U.S. And China, some manufacturers say the tough decisions around workforce reductions will continue as long as tariffs present a problem.
“Going into 2026, we expect to see big changes with cash flow and employee headcount,” one ISM survey respondent said. “The company has sold off a big part of the business that generated free cash while offering voluntary severance packages to anyone.”
