Why tariffs have hit Americans’ jobs harder than their shopping carts (Video Transcript)

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Why tariffs have hit Americans’ jobs harder than their shopping carts

Here’s what doesn’t add up.
In April 20 25, President Trump promised one thing above all else: Manufacturing jobs would flood back to America.
Factories would boom.
Workers would get good paying positions.
He called it Liberation Day, But here’s the twist that nobody’s talking about.
9 months later, we discovered something that shatters the official narrative.
Manufacturing lost more jobs after the tariff announcement than it gained.
And the strangest part- Your groceries didn’t get that much more expensive.
Not yet anyway.
So how can prices stay low while jobs disappear?
The answer to that question reveals one of the most misunderstood economic tricks of twenty twenty five, and it explains why average Americans are about to get hit MUCH harder than they realize.
This is the story they don’t want you to understand.
Let me start with the official story, because it matters.
On April second 20 25, the Trump administration announced massive new tariffs.
The president claimed these tariffs would protect American workers and bring manufacturing back home.
The idea was simple: If foreign goods become more expensive, Americans will buy American made products instead.
Factories will boom.
Jobs will multiply.
It made sense on the surface.
It made sense to the voters who wanted to believe it.
It made sense to the politicians who needed to sell it.
But there’s a problem with simple explanations of complex economies.
By the time we got to January 20 26, just 9 months later, the data came in and it told a story that contradicted almost everything we’d been told.
The numbers are stark.
The year 2025 became the worst year for job growth since the pandemic ended.
It’s not bad, not mediocre, catastrophic.
by modern standards, the United States economy added only five hundred eighty four thousand jobs the entire year.
20205 compare that to twenty twenty four, two million jobs.
that’s a seventy percent drop.
think about that- went from a booming job market to something approaching a job market freeze in literally one year.
and the turning point, April 20 25, right when the tariffs started manufacturing, it was hit especially hard since april’s liberation day.
the nation lost fifty nine thousand manufacturing jobs not created.
lost the exact opposite of what was promised.
let me break that down for you, because this number needs to sink in.
fifty nine thousand manufacturing jobs disappeared.
these are positions in factories and production, in the industries that were supposed to benefit most from the tariff protection.
Job openings in manufacturing collapsed by 76000.
Companies stopped hiring.
They started laying workers off.
John Deere, One of America’s iconic manufacturers.
They announced a dollar three hundred million in tariff costs in twenty twenty five and they doubled that figure by year end.
The company laid off 238 workers across factories in Illinois and Iowa.
Automakers announced nearly five thousand job cuts in July alone.
The promise of manufacturing’s return became the story of manufacturing’s collapse.

But here’s where the mystery deepens.
If tariffs or taxes on imports- if they’re supposed to make foreign goods more expensive, then prices should have gone through the roof right.
That’s what the public expected.
That’s what economists predicted in some quarters.
But the strangest thing happened.
Through August 20 25, retail prices on imported goods increased by only about 2 percent.
Maybe a little here, a little there, but nothing remotely close to the tariff burden that was actually being imposed.
For context, the tariff revenue on imported consumer goods was hitting about 13 percent of the total import value By July.
let me translate that.
You’d expect prices to jump by about 13 percent.
Instead they went up by about 2 percent.
What happened to the other 11 percent?
This is where it gets fascinating.
This is where you start to see the hidden mechanism.
Businesses absorbed it.
American companies took the tariff hit directly to their bottom lines.
They ate the cost.
They sacrificed profit margins to keep prices stable for consumers.
Why?
Because they had inventory Before the April tariffs were announced.
companies imported goods at the old prices.
They had warehouses full of products bought before the tariff bomb dropped.
So they could sell those old products at old prices for months without reflecting the new tariff costs.
to consumers, It was like they had a buffer, A shield.
Pre-tariff inventory became their survival tool.

But here’s what matters.
That inventory has finite.
Every month they sell more old stock.
Every month the buffer gets thinner.
Starting in late 20 25, something began to happen.
Companies realized we’re running out of cheap inventory.
So they did what any business would do.
They started planning price increases- Not aggressive ones yet, but they started building them into their projections.

S&P Global analyzed this.
They found that roughly 80 percent of the tariff costs was absorbed by American businesses through 20 25.
But- and this is critical- that percentage is shrinking As we move through 20 26.
economists expect consumers to bear 2 thirds of the tariff burden instead of one third.
That’s a massive reversal.

the University of Michigan economists calculated it this way: Your family shopping cart is about to get approximately dollar two thousand six hundred more Expensive per year when the full tariff impact hits.
think about that figure.
26 dollars, not two million six hundred two thousand six hundred dollars additional dollars per year for an average family.

…but the jobs?
The jobs disappeared immediately, And that is the paradox at the heart of this whole story.

Why did jobs collapse immediately while prices stayed relatively stable for months?
The answer isn’t complicated, but it’s powerful.
It reveals something important about how businesses actually work.

When manufacturers faced higher input costs, tariffs on the parts and materials they need to make products- they had 3 choices.
first choice: they could absorb the costs and accept lower profits.
Many tried this.
second choice: they could pass the costs to consumers immediately by raising prices.
Some tried this too, but cautiously.
third choice: They could reduce costs elsewhere.
And there’s one place where costs can be reduced relatively quickly: The workforce.

Here’s the dark truth: It’s easier to cut jobs than to cut profit margins, especially in an uncertain environment.
When a CEO doesn’t know if tariff rates will change next month, when they don’t know if trade relationships will shift, when they’re facing constant policy whiplash, they stop planning for growth, They stop hiring, they start planning for survival, And survival means keeping only essential staff.

There’s research on this.
Economists studied the tariffs from 2018 back, when President Trump first tried tariffs on steel and aluminum.
They found a clear pattern.
When import protection was in place, the part that should have helped domestic manufacturers, it created a small benefit: 0.4 percent increase in employment.
But when the higher input costs kicked in, the tariffs on the materials manufacturers need created massive damage.
A two point zero percent decrease in employment factor in retaliation tariffs from other countries and the total impact was negative: 2.7 percent in manufacturing employment.
In other words, the tariffs that were supposed to protect manufacturing jobs actually destroyed them by more than 6 times the initial benefit.

And that 20 18.
experience is happening again in twenty twenty five and twenty twenty six, but on a much larger scale.

Here’s a quote from a CEO that tells the real story.
This is Julie Robbins, who runs a guitar pedal manufacturer in Akron, Ohio Earthquaker Devices.
She said These tariffs are merely a burden on American manufacturers like mine.
There’s no advantage.
It’s a sudden tax that hampers our capacity to hire and expand.

She goes further.
We can’t recruit or expand without stability in policy and predictability in costs.
We are now compelled to navigate an uncertain landscape, which is incredibly challenging.

This is a manufacturer who should benefit from tariff protection.
American company, American workers, American brand.
And what did she do?
She stopped hiring, She halted expansion plans.
She went into defensive mode.

And she’s not alone.
Across manufacturing, across wholesale trade, across energy companies adopted the same strategy: Freeze hiring, maintain costs, wait for policy clarity.
that may never come

The result: Manufacturing shrank for 8 consecutive months.
as of late, 2025 Job postings collapsed.
unemployment ticked upward.

This all happened while most consumers barely noticed changes in their shopping carts.
That’s the mechanism.
That’s why jobs got hit first.

I want you to understand the inventory story deeper, because it’s crucial to what’s coming in.
2026, Before tariffs were announced, American retailers and businesses were importing goods in massive quantities at pre-tariff prices.
This is normal business.
You plan for inventory, You buy in advance.

So when April 2025 rolled around and the tariffs suddenly appeared, companies had warehouses full of goods purchased at the old prices- goods with old profit margins built in.
Here’s what that meant.
practically Imagine Nike imports a container of shoes at 50 dollars per pair.
It plans to sell them for 120 dollars.
The margin is 70 dollars per pair.
Profit margin 58 percent.

Then tariffs hit Suddenly: new shoes cost 65 dollars per pair to import a thirty percent jump due to tariffs.
Nike could do one of 3 things.

Option one.
Drop the profit margin to 55 dollars.
Keep selling at 120 dollars.
New margin.
46 percent instead of 58 percent.
They eat the tariff cost.

It’s option 2.
Raise the price to 145 dollars.
keep the margin at 70 dollars but now they risk losing customers

option 3 mix the old and new inventory sell the old inventory at 120 dollars the new inventory at 130 dollars or 135 dollars gradually transition prices upward while managing customer expectations

Most companies chose a version of option 3.
They use their pre-tariff inventory buffer to manage the transition slowly.

But economists have now calculated that buffer lasts roughly 6 to 9 months for most product categories.
By late 20 25, early 20 26, that buffer starts running out.

And when it does, something changes.