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Dow Jones NewsMay 1, 2:12 PM UTC
MW American manufacturers are slumping again - and trade wars are to blame
By Jeffry Bartash
ISM survey show optimism after Trump election has evaporated
American manufacturers had just begun to emerge from a long slump when the Trump trade wars struck. Now they have fallen back into contractionary territory as they try to cope with widespread tariffs.
The manufacturing index of the Institute for Supply Management slipped to a five-month low of 48.7% in April from 49% in the prior month. Any number below 50% signals contraction.
All the optimism after President Trump was elected in November has vanished amid the worst global trade wars since the Great Recession in the 1930s. Companies were expecting a pro-business president, but did not anticipate the worst trade wars in decades.
"Tariff whiplash is causing us major issues with customers," a top executive at a machinery maker told ISM.
"Tariff trade wars are incredibly volatile, quickly changing, and disrupting a ton of our current work," an apparel executive also said.
Big picture: Trade wars have benefited a few manufacturers such as steelmakers, but most other companies face the prospect of weaker sales and higher costs due to the current level of tariffs.
Although the economy is holding up so far, economists and business leaders warn tougher times are coming unless the trade disputes are resolved soon.
To wit: First-quarter GDP fell for the first time in three years because of a record surge in imports tied to the trade wars.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX rose in Thursday trading.
-Jeffry Bartash
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05-01-25 1012ET
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