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Tariffs Are Squeezing US Manufacturing

The US manufacturing sector faced its sixth consecutive contraction in August 2025 due to tariff uncertainties and higher costs despite growth in new orders, ISM data showed.

  • On Tuesday, the Institute for Supply Management reported price gains decelerated to 63.7 from 64.8, while manufacturing production slipped back into contraction territory in the U.S. manufacturing sector.
  • Amid an uneven rollout of trade measures, manufacturers said Trump administration trade policy and supplier surcharges pushed input costs higher and undermined hiring.
  • Survey internals show production slipped into contraction, employment remains weak at 43.8%, prices paid eased slightly, and order backlogs fell, reflecting ongoing cost pressures and subdued hiring.
  • This leaves policymakers facing tariff uncertainty that delays investments, while the U.S. Federal Reserve appears poised to cut rates despite trade policy headwinds for U.S. businesses and manufacturers.
  • Internationally, Brazil's President Lula called a BRICS meeting for September 8th, while Japanese Prime Minister Ishiba and India's Trade Minister pursue measures amid legal uncertainty from a U.S. appeals court ruling on tariffs.
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Zero Hedge broke the news in United States on Tuesday, September 2, 2025.
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