US manufacturing contracts for sixth straight month amid tariff drag

Source: Reuters

U.S. manufacturing contracted for a sixth straight month in August as factories dealt with the fallout from the Trump administration's import tariffs, with some manufacturers describing the current business environment as "much worse than the Great Recession."

The Institute for Supply Management (ISM) survey on Tuesday also showed some manufacturers complaining that the sweeping import duties were making it difficult to manufacture goods in the United States. President Donald Trump has defended his protectionist trade policy, which has raised the nation's average tariff rate to the highest in a century, as necessary to revive a long-declining U.S. industrial base.

That was reinforced by government data showing spending on the construction of factories dropped in July and was down 6.7% from a year ago. A U.S. appeals court ruled last Friday that most of Trump's tariffs were illegal, adding more uncertainty for businesses.

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Tariffs continued to dominate commentary from manufacturers. Some makers of transportation equipment said conditions were worse than the 2007-09 recession, adding "there is absolutely no activity" and "this is 100 percent attributable to current tariff policy and the uncertainty it has created." Some viewed the conditions as consistent with "stagflation."

Read more: https://www.reuters.com/business/us-manufacturing-contracts-sixth-straight-month-amid-tariff-drag-2025-09-02/