Lots of imports, no tariff consistency, and few orders to match? Not a good combo

The country's manufacturing situation was already struggling before Donald Trump took office, with over 100,000 jobs lost in the sector in 2024, and America now has 135,000 fewer jobs in manufacturing than they did in its February 2023 peak.

There was a growth in new orders for manufacturing in January following 2 months of declines to round out 2024. But as I have mentioned before, the boost in new manufactured orders for January was almost entirely due to a one-month increase of $9.8 billion in non-defense aircraft. The dollar amount for the other 97% of manufactured goods was basically unchanged, with new orders for auto bodies actually dropping by 1.5%, and construction machinery orders down 2.2% for January, and down 6.4% year-over-year.

Then turn around to another report from last week which showed a massive increase in imports for January, in order to front-run possible Trump tariffs. This was especially true with “finished metal shapes”, which went from $13.75 billion of imports in December to $34.23 billion in January. These are basically pre-made structural beams and tubes that require little to no further manufacturing once it gets to America.

Given today's events, you can see why manufacturers of metal items were trying to stockpile their imports. Look at this routine from our Dear Leader, which helped prompt another losing day on Wall Street.

President Donald Trump is reversing course and no longer doubling tariffs on steel and aluminum imports from Canada, Peter Navarro, the White House’s senior counselor for trade and manufacturing, said Tuesday.

The abrupt shift comes in response to Ontario Premier Doug Ford saying he would suspend a 25% electricity surcharge on about 1.5 million U.S. energy users in New York, Michigan and Minnesota....

Trump's turnabout came after saying Tuesday morning that he would be doubling tariffs on Canadian steel and aluminum imports, set to go in effect Wednesday, from 25% to 50%. With Trump backtracking, the steel and aluminum tariff rate for Canadian imports will remain at 25%.

So who knows how much it'll cost to import these products tomorrow, or how much it'll cost to make them here? Not a recipe to keep the economy growing, that's for sure.

But all of that extra product is going to have to be sold some time soon. And if some burst of demand doesn’t appear in the coming months (and it ain't), those products might have to be dumped at a loss, without much of a need for further orders and business in future months and years. Those bad business situations would be even worse if demand goes down due to recession.

Oh, and did I mention there was an increase of more than $1 billion in passenger car imports for January at the same time that there was that January decline in orders for auto bodies, and a January increase in inventories for cars and trucks. But at the same time, tariffs seem likely to raise prices of imported cars right when there is a lack of demand from both business and consumers.

If the laws of supply and demand still exist, it sure seems like we have a recipe for falling profits and lower production in the auto industry. And likely other manufacturing industries.