Episode summary
Is Trump’s Manufacturing Comeback Real?
Wall Street Week
· · Hosts: Chrystia Freeland, David Westin · Guests: Steve Rattner
Summary
Steve Rattner argues that Trump’s manufacturing comeback has not materialized: industrial output was already weakening before Trump, January’s uptick is too small to matter, and there is no clear sign that tariffs have shifted the basic trajectory of US manufacturing. He says companies are not rushing to build plants in the United States because of tariff pressure, even though capital spending is strong in data centers.
On tariffs, Rattner says they can make sense as temporary protection for young industries, but not as a permanent strategy. He pushes back on the idea that threatening foreign governments will automatically produce new US factories, and says tariffs on auto parts mainly raise costs for US OEMs. In autos, he argues Trump’s anti-EV policy has become a “speed bump,” while Chinese EV maker BYD is being kept out at a major cost to consumers.
Rattner frames the tradeoff as economic efficiency versus strategic resilience. Opening the door to cheap imports would help consumers and might even help the economy, but it would reduce domestic industrial capacity that could matter in a crisis. He says manufacturing jobs are no longer especially high-paying, and the real priority should be future-oriented industries like chips, where he sees the CHIPS Act as a success. On Trump’s claim of 15% GDP growth, Rattner calls it fantasy and says AI may lift productivity enough to support 3% to 3.5% growth, but not anywhere near that level.
Key takeaways
- Steve Rattner says there is no evidence yet that Trump’s policies have changed the downward trend in US manufacturing output or employment.
- Rattner argues tariffs can protect infant industries, but using them to permanently offset cheaper foreign production is the wrong model.
- He says keeping BYD out of the US could cost consumers about $160 billion a year if the price gap is roughly $10,000 per car.
- Rattner thinks Trump’s anti-EV stance has hurt the auto industry more than helped it, especially by raising costs for OEMs through tariffs on parts.
- He says 15% GDP growth is unrealistic and that AI, not tariffs, is the more plausible source of higher productivity growth.
Notable quotes
“I don't think you could say that. Uh, manufacturing output had been declining actually quite steadily going back to even before Trump”
“there's no there's not yet, and I I to give be fair to the president, I think you have to say not yet, any sign that his policies have changed the trajectory of manufacturing in the United States”
“We can bring back some of it. Uh even Alexander Hamilton uh advocated for tariffs”
“you're talking about $160 billion a year that consumers in the US are paying because we feel it's important”
“Not going to be 15%”
How the episode opens
President Trump campaigned on returning manufacturing growth to the United States and the White House, I looked this up, says that they are surging forward with unprecedented momentum. Are they? Um, no.
I don't think you could say that. Uh, manufacturing output had been declining actually quite steadily going back to even before Trump. It did go up in January, but that's one month and I don't think we can draw any conclusions from that.
But essentially, our our manufacturing continues to go down. Uh, and for the most part, manufacturing employment goes down. Productivity has been bouncing around a bit.
We can talk about that. But no, there's no there's not yet, and I I to give be fair to the president, I think you have to say not yet, any sign that his policies have changed the trajectory of manufacturing in the United States.
Some of the challenge may be timing. It takes a while to build a plant to get up and running. What kind of time horizon, you know, manufacturing well, are we looking at to really grow manufacturing?
Oh, certainly a few years. But but the question is uh that is is anybody actually doing this and uh I don't know. I would say anecdotally I haven't heard anybody say any you CEOs or that they're rushing out to build plants here because of all this.
There's obviously a huge boom in construction going on in data centers um which don't manufacture things but it's an capital investment in the US but I don't have any sign or any idea that the number of uh car plants in this country is increasing because of uh because of what Mr. Trump has been doing.
An important tool for President Trump in his toolbox on manufacturing are tariffs.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tariffs
- us manufacturing
- trade policy
- industrial output data
- ai productivity
Companies and tickers mentioned
- BYDDY
- BYD
- Willett Advisors
Watch the episode
Watch “Is Trump’s Manufacturing Comeback Real?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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