As Elon Musk revealed that he tried to persuade President Donald Trump not to impose sweeping tariffs, US manufacturers are linking the tariffs to industry problems.
In an interview with investor and entrepreneur Nikhil Kamath released Sunday, Musk said he warned Trump against the tariffs, arguing that it would “create a distortion in the market.” Tesla’s CEO previously expressed concern that import taxes would cause a recession and raise the price 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 that he likes tariffs,” Musk said in the interview. “I tried to dissuade him from this approach, but failed.”
“Do you want a tariff between you and everyone else on an individual level? It makes life very difficult,” he continued. “Do you want tariffs between every city? No, that would be too annoying. Do you want tariffs between every state within the United States? No, that would be disastrous for the economy. So, why would you want tariffs between countries?”
The White House did not immediately respond fateRequest for comment.
In addition to the tariffs threatening Musk’s own company, U.S. manufacturers are now linking Trump’s tariffs to shrinking industry and the drastic labor cuts they need to keep their businesses afloat. This is contrary to Trump’s intent in imposing the tariffs, which he claimed would be a catalyst to regain American factory jobs.
According to the Institute for Supply Management (ISM), US manufacturing contracted in November for the ninth straight month. Manufacturing PMI The report, released on Monday, included new orders and supplier deliveries, as well as a pullback in employment. Some of the manufacturing industry workers surveyed said that foreign production has increased due to slower trade and tighter labor.
“We’re starting to establish more permanent changes because of the tariff environment,” said one survey respondent in the transportation equipment industry, according to the report. “This includes staff reductions, new guidance to shareholders, and the development of additional offshore manufacturing that would otherwise be for U.S. exports.”
Recent employment data has confirmed some manufacturers’ concerns. The U.S. Bureau of Labor Statistics’ jobs report showed manufacturing jobs fell by 6,000 last month in October, although nonfarm payrolls rose by 119,000. According to the data, the number of manufacturing jobs lost since Trump pushed through the tariffs in April has reached 59,000 due to a reduction in the role of factories.
said Laura Ulrich, director of economic research at the Indie Hiring Lab fate The shrinking manufacturing sector is, in part, the result of tariffs that disproportionately kill intermediate goods, which are products used in the process of creating a finished good. This can increase production costs, forcing companies to reduce headcount. Pantheon macroeconomics analysts Samuel Toombs and Oliver Allen similarly said in September that the tariff-hit was a result of companies trying to maintain margins amid rising input costs.
Ulrich also noted that business uncertainty is forcing companies to think less about workers and more about sourcing decisions and pricing.
“It’s striking how soft manufacturing has become because, in theory, you put tariffs in place to protect domestic manufacturing, so that domestic manufacturing employment increases,” Ulrich said. “And we’ve seen the opposite.”
Despite warming trade relations between the U.S. and China, some manufacturers say tough decisions about job cuts will continue as long as tariffs pose a problem.
“Going into 2026, we expect to see big changes with cash flow and employee headcount,” said one ISM survey respondent. “The company sold a large part of the business that generated free cash while offering voluntary severance packages to some.”
This story was originally featured on Fortune.com
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