New World Invesment Research

The US trade deficit jumped more than 17% as of August, reaching $889 billion year-to-date with a continuing decline in US manufacturing payrolls as per charts.

Tariffs imposed earlier this year were meant to protect domestic employment and manufacturing, but the trend is the opposite as for now. Even if tariffs will end up being effective eventually, the time lag is uncertain. Rebuilding domestic capacity requires sustained capital investment and productivity gains, and U.S. manufacturers still face structurally higher labor and operating costs compared with global competitors.

Where is the US going to take this? How is the US planning to compete with China, India, and other emerging markets?

As of now, tariffs are raising input prices and passing them through to consumers. 2025 Black Friday revealed that order volumes fell 1% as average selling prices rose 7% (Salesforce Data). Consumers also purchased fewer items at checkout, with units per transaction falling 2% on a year-over-year basis. In other words, consumers spent more during Black Friday in 2025 but purchased fewer goods.