BY BRUCE CRUMLEY
Jun 18, 2025
The stated goal of President Donald Trump’s sweeping tariff policy is to make importing so expensive that companies will relocate foreign production and supply chains back to the U.S.—generating countless jobs and economic growth as they do. The problem with that plan is the trade tensions and business uncertainties it’s creating appear to be undermining the domestic and foreign manufacturing investment Trump’s strategy hopes to stimulate.
Though Trump is doubtless playing the long game with his efforts to coax—or financially coerce—U.S. companies to reshore production, evidence thus far seems to indicate nearly the opposite is happening. To be sure, some foreign companies, like Nissan and Hyundai, have committed to returning to existing factories in the U.S. or building new ones. Meanwhile, General Motors said this month it will invest $4 billion in domestic plants to take over work currently done by factories in Mexico.
But for many manufacturing businesses, continued uncertainty prevents them from effectively planning to expand. In some cases, it’s even causing them to cut production, as foreign customers or partners revise their commitments downward or drop them completely.
That’s a particular problem for domestic makers of cutting-edge batteries, especially those used in electric vehicles, according to the New York Times.
The boom many of those companies experienced under Biden administration clean-energy policies has gone bust under Trump. The reason: The biggest buyers of those batteries—and suppliers of technology and materials to make them—are mostly based in China, the main target of Trump’s tariffs and trade war.
In some cases, customers in China have canceled orders as costs rose from tariffs. In others, trade partners have postponed or suspended U.S. investment plans in response to the political hostility towards Chinese companies now coming from Washington.
Because China remains the leading buyer and tech provider in battery manufacturing, U.S. companies working to develop their own production find themselves with little room to keep moving forward.
As a result, battery maker AESC cited trade and tariff uncertainties for its decision to pause construction of its $1.6-billion factory in South Carolina, the Times said. Even automotive giant Ford is now questioning the future of its $3-billion car-battery plant underway in Michigan, where it planned to use technology licensed from China’s Contemporary Amperex Technology.
The administration’s promised new investments aren’t showing up elsewhere yet, either.
By and large, businesses that have announced spending on U.S. production since Trump took office have usually reiterated plans they’d already finalized—such as Apple’s $500-billion domestic investment plan. Otherwise, companies have more often decided to scale back or scrap new manufacturing projects in response to the rising uncertainty they face from tariff and trade policies.
“The current operating mode is just the death to long-term investment,” Andrew Anagnost, CEO of manufacturing and factory design software company Autodesk, told Bloomberg. He said that while some clients who had previously launched construction or expansion plans were moving ahead with those, uncertainties and doubts that have arisen from tariffs and their consequence are “stalling future projects.”
That’s not the only undesired production impact of Trump’s tariffs. The Institute for Supply Management’s survey for May recorded the third straight monthly drop in manufacturing output, with member comments almost invariably citing disruptions from import duties as the reason.
A separate study by the National Association of Manufacturers found confidence among its members dropped from nearly 71 percent in the first quarter to 55.4 percent heading into Q2. Over 79 percent of respondents reported suffering cost increases, 57.4 percent had lowered their growth outlook compared to previous months, and over a third said they’d canceled or delayed investments while freezing or cutting headcount.
An uneven policy stalls plans
Critics have long blamed the uncertainties created by Trump’s continued shifting on tariffs for forcing U.S. companies to be extra careful before committing to business development or increased domestic production. Now, they add, the anger and resentment the policies have provoked among trading partners has seriously undermined his objective to stimulate foreign investment in U.S. manufacturing as well.
“For there to be an effective industrial strategy, you have to make America irresistible for investment,” Biden administration energy secretary and former governor of Michigan Jennifer Granholm told the Times. “You can’t play a game with no offense.”
But things may soon get even more complicated for Trump’s objective to attract both domestic and foreign investment for U.S. manufacturing.
This week, Senate GOP members unveiled a bill containing a so-called “revenge tax” that would be slapped on businesses from any country whose government adheres to a 2021 international agreement. That accord calls on all signatories to apply the stipulated minimum tax on multinational companies that have long escaped paying their fair share in countries where they do most of their business.
They’ve done that by placing local operations in those various nations—primarily in Europe—under a single corporate entity headquartered in countries with negligible corporate fiscal obligations, usually Ireland. The 2021 accord cinched up that taxation loophole by requiring signatories to enforce the agreed minimal tax rate—if not a higher level.
But with most of the corporations targeted by that being American giants like Apple, Microsoft, and Amazon, the Senate plan seeks to retaliate against countries applying the rule. Under it, they’d slap the revenge tax on any business from those offending nations that have operations and investments in the U.S.
The problem is, that too would likely cool any ideas those foreign businesses might otherwise have about investing money on production in the U.S.
“Trump wants onshoring, and now if we’re going to penalize people who are doing the onshoring or the foreign direct investment in the U.S., it’s counter to his goal,” Don Schneider, deputy head of U.S. policy at financial services company Piper Sandler, told the Times.
Story: HERE
