President Donald Trump speaks to guest during a groundbreaking ceremony for the $10 billion Foxconn factory complex on June 28, 2018 in Mt. Pleasant, Wisconsin. (Photo: Scott Olson/Getty Images)
Manufacturing Activity Sinks 'Sharply' as GM Blames Trump Tariffs for Profit Drop
Experts had expected a key manufacturing index number to tick upward, which makes the massive drop in July a significant and unpleasant surprise.
A key manufacturing activity indicator unexpectedly plunged over the last month amid warnings from American automobile giant General Motors that U.S. President Donald Trump's tariffs are swallowing its profits.
The Wall Street Journal reports that the Fifth District Survey of Manufacturing Activity's index "sank sharply" in July and fell to -20, which was a drop from the -8 number posted by the index in June. Experts surveyed by the Journal had actually expected the index number to tick upward to -6, which makes the massive drop in July a significant and unpleasant surprise.
The index is a survey of more than five dozen manufacturing firms located in the mid-Atlantic region of the United States that asks them to report activities including shipments, new orders, and employment. A monthly number below zero indicates that activity in these realms has shrunk rather than grown over the last month, and the Journal notes that the index has been registering negative numbers for five months straight.
And the month-over-month dive in manufacturing activity isn't the only signal of trouble ahead for domestic manufacturing. General Motors revealed on Tuesday that its profits took a significant dent in the past quarter thanks in part to the Trump tariffs on vital components such as steel.
In all, GM's core profits fell by $3 billion on the quarter and it projected that its third-quarter profits could drop by as much as $5 billion as more tariffs take effect. Although GM is expanding some of its manufacturing in the U.S. to mitigate some of the impact of Trump's tariffs, that likely can only go so far when big tariffs are still being levied on the imported raw materials that the company needs to build cars.
GM's warning about tariffs comes just a day after Jeep manufacturer Stellantis projected that the Trump tariffs would directly lead to $350 million in losses in the first half of 2025.
Trump made raising tariffs on foreign products a key plank of his 2024 election campaign despite the fact that he also ran on lowering inflation, as tariffs historically have led to higher, rather than lower, prices.
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A key manufacturing activity indicator unexpectedly plunged over the last month amid warnings from American automobile giant General Motors that U.S. President Donald Trump's tariffs are swallowing its profits.
The Wall Street Journal reports that the Fifth District Survey of Manufacturing Activity's index "sank sharply" in July and fell to -20, which was a drop from the -8 number posted by the index in June. Experts surveyed by the Journal had actually expected the index number to tick upward to -6, which makes the massive drop in July a significant and unpleasant surprise.
The index is a survey of more than five dozen manufacturing firms located in the mid-Atlantic region of the United States that asks them to report activities including shipments, new orders, and employment. A monthly number below zero indicates that activity in these realms has shrunk rather than grown over the last month, and the Journal notes that the index has been registering negative numbers for five months straight.
And the month-over-month dive in manufacturing activity isn't the only signal of trouble ahead for domestic manufacturing. General Motors revealed on Tuesday that its profits took a significant dent in the past quarter thanks in part to the Trump tariffs on vital components such as steel.
In all, GM's core profits fell by $3 billion on the quarter and it projected that its third-quarter profits could drop by as much as $5 billion as more tariffs take effect. Although GM is expanding some of its manufacturing in the U.S. to mitigate some of the impact of Trump's tariffs, that likely can only go so far when big tariffs are still being levied on the imported raw materials that the company needs to build cars.
GM's warning about tariffs comes just a day after Jeep manufacturer Stellantis projected that the Trump tariffs would directly lead to $350 million in losses in the first half of 2025.
Trump made raising tariffs on foreign products a key plank of his 2024 election campaign despite the fact that he also ran on lowering inflation, as tariffs historically have led to higher, rather than lower, prices.
A key manufacturing activity indicator unexpectedly plunged over the last month amid warnings from American automobile giant General Motors that U.S. President Donald Trump's tariffs are swallowing its profits.
The Wall Street Journal reports that the Fifth District Survey of Manufacturing Activity's index "sank sharply" in July and fell to -20, which was a drop from the -8 number posted by the index in June. Experts surveyed by the Journal had actually expected the index number to tick upward to -6, which makes the massive drop in July a significant and unpleasant surprise.
The index is a survey of more than five dozen manufacturing firms located in the mid-Atlantic region of the United States that asks them to report activities including shipments, new orders, and employment. A monthly number below zero indicates that activity in these realms has shrunk rather than grown over the last month, and the Journal notes that the index has been registering negative numbers for five months straight.
And the month-over-month dive in manufacturing activity isn't the only signal of trouble ahead for domestic manufacturing. General Motors revealed on Tuesday that its profits took a significant dent in the past quarter thanks in part to the Trump tariffs on vital components such as steel.
In all, GM's core profits fell by $3 billion on the quarter and it projected that its third-quarter profits could drop by as much as $5 billion as more tariffs take effect. Although GM is expanding some of its manufacturing in the U.S. to mitigate some of the impact of Trump's tariffs, that likely can only go so far when big tariffs are still being levied on the imported raw materials that the company needs to build cars.
GM's warning about tariffs comes just a day after Jeep manufacturer Stellantis projected that the Trump tariffs would directly lead to $350 million in losses in the first half of 2025.
Trump made raising tariffs on foreign products a key plank of his 2024 election campaign despite the fact that he also ran on lowering inflation, as tariffs historically have led to higher, rather than lower, prices.