Marketplace - No, Trump's tariffs haven't reshored manufacturing jobs

Episode Date: July 28, 2026

President Trump insists his economic policies have supported a reshoring of manufacturing jobs. At a rally held at a Michigan GM facility on Monday, he doubled down. In reality, the U.S. has lost 75,000 manufacturing jobs since Trump took office in 2025. In this episode, we fact check the President’s claims, and consider the future of Michigan’s auto industry. Plus: Companies begin to offer insurance for AI mistakes, the U.S. trade deficit shrank a bit in June, and UPS winds down its Amazon delivery fulfilment partnership.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:Trump says his aggressive trade policy is bringing back factory jobs. Is it?No really, what is Kevin Warsh thinking?New insurance products cover damages caused by AIUPS and FedEx are moving from higher volumes to higher marginsThe trade deficit fell in June, but remains highAs mortgage rates stay high, this lender is seeing buyers accept the new normal

Eight iconic nights, music from eight iconic bands. Get ready, Toronto, it's back. Classic albums live returns to Massey Hall. The albums you love, live on stage. Note for note, cut for gut. Featuring music from the Beatles, Pink Floyd, Led Zeppelin, U-2 and more. Plus Toronto debuts for Saturday Night Fever, Alanis Morissette and Steely Dan.

Make your night iconic. Classic albums live, only at Massey Hall. Tickets and packages on sale now at Massey Hall.com. On the program today, a little of this, a little of that, some data, some AI, and the Fed. From American public media, this is Marketplace. In Los Angeles, I'm Kyle, Tuesday, 28 July. Good as it always is to have you along, everybody. We've got the June trade gap today, specifically the difference in our goods trade,

how much stuff we bought from overseas versus what we sell there. It shrank about 4% from May, but shrank as a relative term because we are still importing hundreds of billions of dollars more stuff than we export, despite President Trump's tariffs, some old, some new that he has said would bring the trade gap down. Marketplace's Stephanie Hughes has more. Before we talk about the June trade deficit, you should know that American companies imported a lot earlier this year after the U.S. attacked Iran, says nationwide economist Oren Clatchkin. Anytime we get hit with some kind of unexpected shock, companies' first reaction. basically is to go out and raise their, you know, stockpiles. And in June, those companies were like, we are good, causing imports to fall and the trade

deficit to narrow. Still, there are some U.S. industries that just can't get enough imports. I'm looking at Utec sector. It needs computer chips from Asia. Spending on artificial intelligence continues to trend at a really solid pace. This type of investment basically looks past conflict and past tariffs and anything else. The waves of tariffs have affected trade, specifically who we are trading with, says UBS economist Jonathan Pingel. You certainly seen a drop off in imports from China as the China tariffs were increased. And there have been beneficiaries in other parts of Asia, Southeast Asia. And even if American companies are looking to source more goods domestically, it takes a while to up and build a factory, says nationwide's Orrin Clatchkin.

That type of investment is planned out. over years. It goes through multiple layers of sign-off, right? So these things play out over a long period of time. Also, a trade deficit isn't necessarily a bad thing, says Ryan Monarch, an economics professor at Syracuse. If you have a trade deficit, another way of saying that is that your country is a place in which a lot of other countries really want to invest, where they want to put their money into. They give us stuff? We give them American dollars, and that's a sign they leave in the U.S. economy. I'm Stephanie Hughes for Marketplace. Wall Street on this Tuesday, the 30 stocks that make up the Dow Industrials did just fine.

Chipmakers, not so much. Oil down, another 4% or so details numbers when we get there. Some more about this time, we'll have a better sense of what Kevin Warsh and the gang at the Fed are thinking about this economy and how they would like to handle it. As we sit here today, though, while Warsh is not exactly an enigma, he's also not exactly the most talkative. chairman the Fed's ever had. So we're going to do a little preview of what might be coming tomorrow and what it might mean. And we're going to do that with Claudia Assam. She's a chief economist at New Century Advisors. Also, once upon a time, she spent more than a decade working at the central bank. Claudia, welcome to the program. Good to have you on. Great to be here today. Seems to me that the first thing we ought to talk about, obviously, when talking about the Fed, is inflation these days.

What do we know about how Chairman Warsh measures and thinks about inflation? We know that chair wars thinks inflation is too high. We don't know as much about exactly how he measures it or exactly what he thinks behind it, but he has been unequivocal that inflation is too high and then he will get it down. Yeah, but he's got this thing he likes to talk about, this trimmed mean, which we've gone over on this program in the past, which is different than actual, you know, PCE, personal consumption expenditures indexes. We've talked about a zillion times on this program. But it does sort of narrow the range of number one prices and number two outcomes that the chairman's looking at. When Chairwarsh has talked about inflation, and particularly this discussion of the trimmed

mean or trimmed averages, it really fits in a discussion of where is inflation headed. And sometimes to get a better picture of where inflation is headed, you might want to take out some of the outliers, right? And the trim mean or core inflation, taking out food and energy. That can take out some outliers. That does not mean that is the target. Like what the Fed is really trying to do is get overall inflation down. Everything counts. Kevin Warsh mentioned the trimmed averages in his confirmation hearing,

but then in his congressional testimony in recent weeks, he said, well, I don't mean the Dallas Fed PC trimmed mean. I don't have a preferred measure. So we're kind of back to the drawing board on exactly what. what Kevin Warsh is looking at when he talks about inflation. So what does that make you think? You've studied the Fed for a long time. You've worked at the Fed.

You are a trained observer here. What do you take from that? It makes me uncomfortable. You know, there's a catchphrase about the Fed, that they're data-driven. And I think that really is important. You need to have the yardstick that measures success, and you need to really follow the data. And so the fact that I don't have a good sense of how Kevin worse thinks about the data, what he's looking at, it's a little unsettling. And it may just be

he doesn't want to share it because he doesn't want to bias all of us to just look at one measure and not look at all the measures. But it just, it's an uneasy feeling. And if nothing else, it's an unfamiliar feeling. I'm used to listening to Fed chairs talk a lot about the data in great detail. And that's not his approach. What do you make of the reaction that people are having to the chairman's decision not to do the whole forward guidance thing, right? There's, there's been some commentary out there about, oh, it's going to increase volatility. There's been others saying, you know, this is fine. We can, we can deal with this. We'll just react to what the data says. What do you make of it? It is a change. You know, we have a leadership change at the Fed. It's important

to understand the new leader. I think it gets a little blown out of proportion, right? We don't, at this moment, we don't need the Fed holding markets hands. Unfortunately, Kevin or seem to lump that takeaway forward guidance into taking away the reaction function. What is really helpful is to know what are the contingency plans? What would it take for the Fed to raise rates? What data are you looking at? How are you evaluating? What's your timescale?

It has still come out from the Fed. We're getting in some of the committee documents like the minutes, but it sure would be nice to hear the Fed chair say it. But I don't think we'll hear that from him. That is not a path he wants to go down right now. I will say you sound pretty calm. You're vigilant, but you sound like you're okay with what's happening. By and large, we're in a pretty good place. I'm trying to keep things in perspective. You know, pay attention to the changes happening at the Fed. I'm skeptical about a lot of the changes.

I'm watching very closely. But no one should pretend the Fed was perfect before Kevin Warsh came in. So I'm trying to keep a balanced view of all this. And I'm very thankful that we're not. not in a crisis situation in the economy. It's great to have these kind of more intellectual debates about how the Fed does its work as opposed to some big problem that we're trying to get through. Claudia Somm, longtime Fed. Watcher also used to be a long-time Fed employee, now chief economist at New Century Advisors. Claudia, thanks very much for your time. I appreciate it. Thank you. So here's a data point. More than one out of every five companies in this economy use artificial

intelligence in their daily operations. Goldman Sachs did the analysis, the federal government provided the raw data. The theory, of course, and in some cases the reality, is that AI brings with it the promise of higher productivity and higher profits. But even as AI becomes increasingly capable, it's also a reality that AI is fundamentally unpredictable, which in turn creates liabilities for those companies that are using it. And that, ladies and gentlemen, is a business opportunity. Deloitte figures globally, AI insurance is going to be a $5 billion business by 2032. Marketplace's Megan McCarty Carino has that one. At Corgi Cafe in San Francisco's Financial District, you unfortunately won't find any corgi dogs.

That violates the health code, apparently. But you will find plenty of startup founders like Amin Hulu, who's been working from the cafe with his laptop and a couple buddies. We have like five to six businesses, all very successful. He won't go into much detail about what they all do exactly. Someone might steal his ideas. But there's a ski app, sports betting analysis, Reddit marketing, all powered by AI. So it's like you do a lot of work in the beginning, and then you can kind of step away while it's making revenue. Corgi has built its business to serve this.

new generation of AI-native entrepreneurs, says CEO Nico Lockwood, partially with protein shakes and espresso shots. We don't have decaf for a reason. I think people do need to lock in a little bit. But the real business and the namesake Corgi are in the office upstairs. The cafe space just came with the lease and turned into a fun side project. We're best known for our insurance for technology companies. That includes all the usual policies and a new product for AI liability. Just like a human might mess up, AI might mess up even worse,

where it might say things that it shouldn't say and might calculate things that shouldn't calculate. It might even cause outages or things like that. Corgi's policy explicitly covers damages that could result from these AI mistakes. It's something the wider industry has only started to grapple with, says John Farley, who leads cyber practice at the insurance brokerage Gallagher. The insurance market is beginning to move from silence on AI to scrutiny of AI. He says most traditional policies simply don't mention AI, but the insurance industry has begun standardizing language and seeking regulatory approvals to potentially exclude AI from their plans. The challenge, he says, is figuring out how big of a risk AI poses for businesses.

Historically, the insurance markets have used modeling tools rather to measure the likelihood of, say, a hurricane in Florida, right? We've got lots of data there. Here, not so much. How do you know if a brand-new, agentic AI system your company uses to process invoices is likely to make a costly mistake? That's what Inez Boutemaja is trying to quantify with her AI insurance startup claimee. When we onboard a customer, what we actually do is, We test their AI agents. We try and actually trigger the potential errors that would lead to a claim. Like leaking sensitive customer data.

We had the agent in under like the 10 minutes give you information about the previous customer they talked with, their age, their personal information. Agents that fail can be improved and tested again. The better the score, the lower the insurance premium. We pride ourselves of being, you know, the enable. Buller technology adoption. It's like there wouldn't be any skyscrapers in New York if you didn't have like the proper insurance for it. From building skyscrapers to empires of AI apps, innovation creates new risk and for insurers

an opportunity to sell new products. That and 24-7 coffee. In San Francisco, I'm Megan McCarty Carrino for Marketplace. UPS reported quarterly profits this morning better than analysts had. been guessing is the TLDR. UPS managed to do it, even while it continues to wind down what had been a big part of its business, delivering packages for Amazon. The company's CEO said on the earnings call today that they had, and this is a quote, eliminated approximately two million pieces per day of lower quality Amazon volume. First of all, ouch. Also, though, UPS isn't the

first big shipper to move away from Amazon deliveries. FedEx did it back in 2019. Marketplace's Henry Ep has more. Before e-commerce became a big thing, UPS and FedEx made a lot of their money delivering packages to businesses rather than households. Because they make a higher profit margin on those business deliveries, says Lisa Alram, a professor of supply chain management at Miami University. Because if you're going to businesses, there's a much higher probability that you're delivering multiple packages. And businesses tend to be clumped together. A UPS driver, for example, could go to an industrial. Park and make a bunch of stops.

Whereas you're driving off in neighborhoods, particularly rural neighborhoods, it starts getting to be very, very expensive. But as we started to order more stuff online, UPS and FedEx saw a new opportunity, says Zach Rogers, an associate professor of supply chain management at Colorado State University. For them, Amazon was always a volume play. You know, you're delivering a lot of packages at low margin, but high enough volume that it's all right.

Then, about a decade ago, Amazon wanted more control. So it started to build its own delivery system. That left fewer Amazon packages for the UPSs and FedExes of the world. So those companies are increasingly getting out of the business of delivering you, say, a package of socks, and into the business of shipping really valuable stuff, for which they can charge more. What do you pay more for? Pharmaceuticals or a package of socks? And so if they're taking up the same amount of space on the truck,

It's really just the bang for the buck is higher with things like health care products. So UPS is moving from a high volume business to a high margin business, says Jason Miller, a supply chain management professor at Michigan State. You're not necessarily worried about maximizing the amount of stuff you're moving. You're worried about essentially maximizing the profit you can make off of the stuff that you do move. And right now, there's profit to be made, especially by shipping computer gear from Asia to the U.S. for data centers. I'm Henry App for Marketplace. Coming up. It's just expensive to go out to dinner, Kai. Oh, don't I know it? First, though, let's do the numbers.

Down dust drills, up 537 points today, 1% finished at 52,747. Remember, though, that's 30 stocks, people. NASDAQ down 55 points, about 2 tenths percent, 24,876. S&P 500 crept up 15 points, about two-tenths percent, 74 and 28. United Parcel Service, Henry Ep, which is talking about this, down six and a half percent. FedEx picked up about six-tenths of one percent. Bond prices went up. The yield on the tenure, Tino, down 4.60 percent on the tenure. You're listening to Marketplace.

This Marketplace podcast is presented by Tomorrow's Cure. If our health care coverage leaves you wanting to learn more about the innovations-shaping medicine, tomorrow's cure is for you. It's the chart-topping 2025 Ambio-Wy. finalist podcast from Mayo Clinic. Back for a brand new season with new host award-winning journalist Lindsay Sievert, Tomorrow's Cure explores the innovations changing the health care landscape. Featuring conversations with leading physicians, researchers, and medical experts, the new season examines everything from AI-powered diagnostics and cutting-edge cancer therapies to surgical technologies

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Featuring music from the Beatles, Pink Floyd, Led Zeppelin, You Too, and More. Plus Toronto debuts for Saturday Night Fever, Alanis Morissette and Steely Dan. Make your night iconic. Classic albums live, only at Massey Hall. Tickets and packages on sale now at Masseyhall.com. This is Marketplace. I'm Kai Risdahl. President Trump was in Michigan this week, stumping for

Republicans and talking up his second-term economic policies, which he said have brought manufacturing jobs back to that state still, as you know, of the American auto industry. Those policies, of course, have included at times steep tariffs on Canada and Mexico, both of which are critical links in Detroit's supply chain. The claim from the White House is the tariffs and the rest of the Trump trade agenda are going to drive a reshoring boom in manufacturing and in factory jobs. Marketplace's Mitchell Hartman has more now on how that's working out. Since President Trump started his second term in January 2025, the economy has lost 75,000 manufacturing jobs, according to the Bureau of Labor Statistics, a 6-10th percent decline.

Manufacturing has not revived to a significant degree. It's a trend that started in the 80s, says Mark Zandi at Moody's Analytics. The job losses continue. Tariffs and other policies that have been put in place have not reversed that. But tariffs may still be helping U.S. manufacturers, says a client. Laura Veldcamp at Columbia Business School. It made it more profitable for American manufacturers to set up and produce here. That's because tariffs on imports diminish the competitive advantage of using lower-cost labor in places

like Mexico or Malaysia. So we're making more in the U.S. now. Manufacturing output's gone up 1.1% over the last year. But we're doing more with fewer people, as Mark Zandi explains. manufacturing activity is very mechanized, automated. So even if you see a pickup in output, and we've seen that, particularly in the tech sector and the defense aerospace industries, doesn't translate into jobs because these factories just don't employ a lot of people. Now, the story is a little different in the crucial U.S. auto industry, where employment's down more than 2.5% since January 2025.

One big problem, says Ned Hill at the Ohio State University's Manufacturing Institute, Demand for new vehicles has been weak because many consumers can't afford them. The average price has been bouncing just under $50,000. You have to be solidly above the middle of the income distribution to buy an average car. Looking forward, though, says David Whiston at Morningstar. Some of these jobs may come back. There are some automakers looking to onshore production to the United States, and that can create jobs for all suppliers.

He points to recent plans announced by GM in Kansas and Tennessee and Toyota in Texas. I'm Mitchell Hartman for Marketplace. We were talking earlier, Claudia Somm and I, about which way the wind is blowing at the Warsh Fed, how the new chairman's thinking about inflation, and with it what the central bank is going to do on interest rates. And while we're all going to feel whatever changes they make or don't make in one way or another, if you're a would-be home buyer, I'm going to bet you'd be very interested in what happens tomorrow. So we've called Vivian Geller. She's a chief financial officer at Pacific Trust Group. that's a mortgage lender here in Los Angeles.

Vivian, welcome back to the program. Thank you, Kai. It's always nice to be back. I'm going to throw a number at you here. I want you to give me your reaction. 6.58%. That's what Freddie Max says the 30-year fixed average rate is.

Discuss, please. Well, Kai, we were expecting it to go down, as I had said last year. And, of course, you know, this war happened, and energy prices skyrocketed across Europe, of course, and a lot of parts of the world. And so here we are with six and a half percent rates. And here we are with you being in the real estate business.

I mean, what's that doing to you? It cannot be good, right? Well, it's certainly not helping, although we are still seeing, you know, the stock market's doing well. So we're seeing, you know, a lot of cash buyers and high-end markets and the second home market. People that have been on the sidelines, they realize that this is probably going to be a while. so they're just jumping off the sidelines and starting to look around a little bit. There's been more inventory this year than their husband in a while. What I hear you saying is people just got tired of waiting, right?

Yeah, for the most part. There's certainly no anticipation for rates to go down. We know the Federal Reserve is meeting today and tomorrow. I think there's a 62% chance that rates will remain a small chance that they might go up. but they're not going to come down. Did you used to have to pay this much attention to the Fed? Sorry, this is just a little sidebar. No, no, absolutely, you're absolutely right.

No, we didn't, especially, you know, prior to five, six years ago, certainly prior to COVID. We weren't like sitting here waiting in anticipation to see what's going on. Right. So crystal ball this for me. You know, if rates stay where they are and maybe even go up a little bit, you know, game out the next like six to eight months in the housing market. And, you know, you're in L.A. and so we've got our own issues here. But, you know, speak broadly for me if you can.

Well, I mean, nationally, it's at least status quo, maybe a little dip in the market. I don't think we're going to see a crash. Los Angeles, you know, we have this huge problem with inventory. So we're always going to see the market move here on good houses, well-priced houses. And there's still question mark too about what's going to happen with this war and how that's going to affect our long-term economy. Yeah, for sure. Let me ask you something about a topic that we carded a couple of times in the last couple of weeks. And again, as broadly as you can speak, this idea of starter homes. You know, we want people to get into the housing market is a great way to build wealth, all of those sorts of things. But the starter home does seem to be becoming

a very scarce bird. Yeah. Well, you know, inflation has impacted us nationally, significantly. we haven't seen wages go up to any significant extent. So, you know, how can you buy a starter home when you're just not making enough money? And, I mean, it's a really, really scary predicament for a lot of first-time buyers. You know, it's just expensive to go out to dinner, Kai. You know, let alone buy a house or renovate a house or, you know, have your plumbing fixed if something goes wrong with, you know, your toilet or whatnot. You know, it's really, really, really expensive to, you know. It's really, really expensive to own a house right now. When you are talking to buyers or would-be buyers, what are those conversations like? Well, you know, I try to be realistic with people and, you know, not play games. So we know

interest rates are not going to go down anytime soon. So if they've got a decent income and they've got some money set aside, now is a decent time because they're not competing against a million other buyers to buy a house. So if they can afford to buy a house at six and a half percent, and ride it out maybe two years until they can refinance, then they're going to be in a good place. But, you know, if you're really rate sensitive, my suggestion would be to just, you know, sit it out for right now. Vivian Galler at Pacific Trust. Vivian, thanks a bunch. Thank you, Kai. This final note on the way out today, which honestly makes you wonder what we are even doing.

So all this in fortune, bear with me, I'm going to rattle off some numbers. Total movie box office for North America last year, almost $9 billion. Recorded music revenue, a record $11.5 billion. Live music, another $18.5 billion. Book publishing, $14.5 billion. Museums, $16.5 billion. Add it all up, all in. It's about $70 billion.

Total sports betting in the United States last year, $166 billion American dollars. Jordan Manjee's, O'Neill Maharaj, Janet Winn, Olga Oxman, and Virginia Kaysmith are the digital team. I'm Kaahe-Rizdaul. We will see you tomorrow, everybody. This is 8 p.m. I'm Rie McRaez, host of the weekly Marketplace podcast, This is Uncomfortable. And this week on the show, Marketplace Correspondence, Kristen Schwab and Sabree Benashore, help me give advice about your workplace drama. Everything from pushy co-workers to the politics of getting ahead.

Relationships at Jobs, Mesh, matter. And people who are schmoozy with the boss, it makes a difference. Makes a difference. Be sure to listen to This is Uncomfortable wherever you get your podcasts.