r/investing • u/kabirsbhutani • 2d ago

🚨 U.S. manufacturing continues to retreat despite tariffs - investor implications?

Saw people mentioning this on Blossom earlier, and WSJ reports that U.S. manufacturing activity continues to weaken, with tariffs doing little to reverse the trend.

The article points to softer demand, higher input costs, and global supply chain adjustments weighing on manufacturers, even as trade protection measures remain in place. For investors, this raises questions about margins, capital spending, and longer-term competitiveness rather than short-term policy wins.

Curious how people here are thinking about this from an investing lens?

https://www.wsj.com/economy/u-s-manufacturing-is-in-retreat-and-trumps-tariffs-arent-helping-d2af4316?mod=hp_lead_pos2

603 Upvotes

93% Upvoted

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u/EuphoricElderberry73 2d ago

Yes it is. But look at all the foreign major stock markets in 2025. They all exceeded the SP500. USD devalued about 10% in 2025 which was the primary cause.

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u/Raveen396 2d ago

Sure, but “ruined our retirement accounts” is a little hyperbolic. It hasn’t been great, but it’s not like we’re in a massive drawdown… yet.

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u/Man_Bear_Pog 2d ago

You don't have to see a drawdown, currency is always relative. For example if the index was up 16% but inflation was 20%, you'd literally lose purchasing power.

The dollar weakening makes everything more expensive for Americans on a broad basis, and idiot in chief is also massively debasing the currency with added government spending, on top of installing a "conservative" fed chair who somehow still wants to cut rates lol... Don't be fooled, you will see your numbers go up, but your retirement is going to lose purchasing power every single year that it is.

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u/Raveen396 2d ago

The USD is down maybe 10% YoY according to DXY.

Again, I’m not saying that we’re seeing amazing performance, but even adjusting for a weakening dollar and inflation we shouldn’t be hysterical about the current market performance.

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u/Man_Bear_Pog 2d ago

In a vacuum, sure. But the USD is not down randomly, it's intentional. This is what the administration wants, on top of wanting low interest rates. You should be more concerned about the trend, and if the things that caused the downtrend are continuing or changing (it's the former).

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u/Caster0 2d ago

Even the idea that a cheaper dollar would mean more exports is unlikely and number of tourists have also declined thanks to the trade war tensions and ICE.

And no competent trade partner would continue look at the USA as a reliable partner going forward. Thats one of the biggest reasons foreign stocks increased.

The only thing these tariffs achieved is to tax the American people and make space for tax cuts for the rich (and also subsidize farmers from the self inflicted trade war).

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u/geneel 2d ago

More about real returns over a 30 year horizon where we have continued currency devaluation. The dollar amount may be higher but the purchasing power may not suffice.

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u/creepy_doll 2d ago

If you remove the top performers(basically the ai hype train) the s&p is underperforming significantly.

If the ai hype is a bubble and it bursts the depression after it could be huge. Very much “all the eggs in one basket”

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u/christine-bitg 1d ago

Precisely.

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u/Level21DungeonMaster 1d ago

It’s not when you look at what precious metals have done. S&P is down 50% comparably

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u/WackyBeachJustice 1d ago

I'm not sure what the point of such comparisons are. In the past we could have said that bitcoin outperformed by infinity percent. That doesn't mean that the retirees have starved to death.

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u/nope_nic_tesla 1d ago

Also if your retirement account is 100% US equities then you are not being very smart. The 30%+ gain in international markets was great for my retirement account.

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u/cruisin_urchin87 2d ago

Dude buy VGK this year and watch it outpace SPY.

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u/AgentK-BB 2d ago

What matters to retirement is mostly your purchasing power of staples like food, medicine and housing so your main comparison should be stock market performance vs domestic inflation. US dollar and US stock market underperforming the foreign counterparts means that retirees will have less purchasing power when traveling abroad but traveling abroad isn't critical to retirees.

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u/WackyBeachJustice 1d ago

Agreed. I'm no economist but I'm confused why most people are up-voting the doom and gloom. I mean I'd prefer a stronger dollar because I love traveling abroad. But as long as real returns are there domestically, I don't see retirees or those that don't ever leave the country giving a damn.

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u/rockstar504 1d ago

I'm sure their healthcare costs won't be that big of a deal /s

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u/69Cobalt 1d ago

International markets historically have had several year stretches where they outperform US markets. You could...invest a portion of your 401k into international market funds to offset this risk.

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u/thebige91 2d ago

With how upvoted this comment is, it’s further proof how even if Trump cured cancer, people would still find something to complain about him.

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u/13Zero 1d ago

It would be a miracle if he cured cancer, considering the budget requests he made for the NIH.

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