President Trump has argued that his new tariffs will help reverse the long-term decline in US manufacturing, citing the loss of “90,000 factories” since the North American Free Trade Agreement went into effect in 1994.
“Since the very beginning of NAFTA, our country has lost 90,000 factories,” Mr. Trump stated during his Rose Garden speech on April 2, as he announced a slew of tariff increases. The president made the same claim in his Monday remarks.
While the number of factories in the United States has decreased, the claim of 90,000 factory closures appears to be based on outdated data and includes small facilities with only a few employees.
The 90,000 figure corresponds to a 2020 analysis by the Economic Policy Institute, a left-leaning think tank, which discovered that there was a net loss of approximately 91,000 manufacturing establishments between 1997 and 2018.
However, the group told CBS News that the analysis was based on Census Bureau data that was significantly revised in 2021. The updated figures show a net loss of approximately 70,500 manufacturing establishments between 1997 and 2022, the most recent year for which data are available.
According to the Census Bureau’s Business Dynamics Statistics, many of these shuttered facilities only employed a few people.
According to the data, nearly 25% of the 70,500 closed manufacturers employed four or fewer employees. Only 2% of the shuttered plants employed 500 or more people; there were 4,569 in 1997 and 3,136 by 2022.
The White House declined to respond to a CBS News inquiry about the data.
Mr. Trump also stated in the Rose Garden that “5 million manufacturing jobs were lost” since the inception of NAFTA.
In 2020, the Economic Policy Institute reported that 4.7 million manufacturing jobs had been lost. More recent data from the Bureau of Labor Statistics show that job losses from January 1997 to January 2025 are closer to 4.5 million.
Is NAFTA to blame for factory losses?
For years, Mr. Trump has referred to NAFTA as the “worst trade deal ever made,” blaming the agreement for undermining American manufacturing jobs.
The agreement eliminated most trade barriers between the United States, Mexico, and Canada and remained in effect until 2020, when President Trump signed the U.S.-Mexico-Canada Agreement, or USMCA, into law.
The USMCA agreement, negotiated by his administration, preserved many aspects of NAFTA while updating some of the rules.
Supporters claimed that NAFTA made the United States richer, but critics claim it cost jobs, particularly in industries facing competition from lower-wage workers in Mexico.
Estimates vary, but Economic Policy Institute economist Robert Scott suggested in a 2014 analysis that NAFTA resulted in the loss of nearly 690,000 manufacturing jobs in the United States.
Many economists believe that free trade with China has been more important than a North American trade agreement. According to MIT researchers, nearly 1 million manufacturing jobs were lost to China between 1999 and 2011, as the United States normalized trade relations with the country.
Economists point out that free trade is not the only cause of factory closures. Several US recessions in recent decades have also contributed.
According to Joshua Meltzer, a senior fellow at the Brookings Institution, a nonprofit think tank, manufacturing has shrunk as a share of GDP in many developed countries around the world since the 1950s due to increased automation.
“Essentially, manufacturing has just become more efficient, automated, and so on. And we’ve simply needed less labor to produce more and more stuff,” Meltzer explained.
According to the Bureau of Labor Statistics, the number of manufacturing workers in the United States reached a high of 19.6 million in 1979. Since then, the sector has lost over 6 million jobs, and there are currently approximately 12.7 million people employed in manufacturing.
“You can always count manufacturing plants that have shut down, but without a broader set of context to understand why that’s happened [and] what’s happening to the manufacturing sector more broadly, it’s just a cherry picked data point,” according to Meltzer.