Trump’s plan to revive U.S. factories is doomed to fail

Posted on September 4, 2025 by Ryan Dahlman

U.S. President Donald Trump’s tariffs won’t deliver the jobs he promised. The factories needed to replace imports will take years to build and America lacks the workers, capital and stability to make it happen.

In theory, discouraging imports through tariffs should spark a wave of domestic manufacturing, creating jobs and boosting the economy. In practice, building a modern industrial base is neither quick nor simple. Trump has ignored the time it takes to create the conditions for such growth.

Major construction projects in the U.S. are notorious for delays. The Los Angeles to San Diego rail line, for example, began in 2008 with a target completion date of 2020. Now, 2030 is the goal.

The culprit is low productivity and a maze of regulations. Since 2000, private sector productivity has grown by 54 per cent, but construction productivity has risen only eight per cent. A fragmented industry, dominated by small contractors without the capital to modernize, leaves little room for technological improvements.

Even if factories could be built faster, they require massive investment. Yet few investors are willing to commit capital while Trump’s policies shift so often. Why sink billions into a factory that may be obsolete under the next president? This uncertainty is especially damaging in industries that rely on long-term planning, such as auto manufacturing or high-tech production. Capital doesn’t flow where tomorrow’s rules may contradict today’s promises.

The labour shortage is another roadblock. The U.S. lacks both skilled tradespeople and basic construction workers. Most Americans are reluctant to take these jobs, even as unemployment rises. For decades, migrants—many undocumented—have filled the gap in construction, factories and farming. Trump’s push to curb immigration and deport existing workers only deepens the shortage, making it even less likely that new factories will open. Canadians will recognize the challenge, as construction and skilled trades face similar shortages north of the border, leaving projects delayed and costs climbing.

A steady flow of raw materials is just as vital. Tariffs not only cut off imported goods but also the metals and minerals needed to build and run factories. Copper and steel are prime examples. Trump insists the U.S. can mine and produce more at home, but developing a new mine is even riskier and slower than building a factory. It requires more capital, more time, and faces the same worker shortages.

The fallout won’t stop at the U.S. border. About 75 per cent of Canada’s exports go south, meaning Canadian industries that supply parts, raw materials and finished goods will feel the squeeze. Already, supply shortages are spreading. Beer producers are struggling with the rising cost of aluminum for cans. Car prices are climbing, construction materials are harder to find, and appliances are more expensive. Grocers warn that food prices could rise further if packaging and transportation costs continue to escalate. The ripple effects are unmistakable: when the U.S. economy falters, Canadian families see it in higher prices at the checkout line.

Creating the infrastructure to replace imports will take years. It demands capital, labour, raw materials and a stable regulatory environment. Instead, Trump’s policies have undermined all four. The result is clear: unemployment is edging higher, promised jobs are not appearing, and both Americans and Canadians are paying the price through higher costs and reduced economic growth.

Unless policy changes, the gap between Trump’s promises and reality will only widen, leaving two economies more fragile than before.

Dr. Roslyn Kunin is a respected Canadian economist known for her extensive work in economic forecasting, public policy, and labour market analysis. She has held various prominent roles, including serving as the regional director for the federal government’s Department of Employment and Immigration in British Columbia and Yukon and as an adjunct professor at the University of British Columbia. Dr. Kunin is also recognized for her contributions to economic development, particularly in Western Canada.

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