president Donald TrumpTariffs aimed at bringing U.S. manufacturing jobs lost overseas to the U.S. could ultimately reduce the number of domestic workers, according to recent statements from business executives and economic forecasters.

As the labor market has followed A no-fire, no-hire climateThere are growing concerns that tariffs on U.S. imports will raise operating costs and force companies to start laying off workers.

For example, the respondent Institute for Supply Management November Survey High levels of concern were expressed about the conditions at the factory.

“We are beginning to make more permanent changes due to the tariff environment,” one transportation equipment executive wrote. “This includes reducing staff, providing new guidance to shareholders, and developing more offshore manufacturing that would otherwise be used for U.S. exports.”

The ISM survey does not identify respondents by name but by industry.

Similar comments emerged elsewhere in the report, which showed a further slight decline in the ISM manufacturing index, pointing to a decline in business conditions. The headline figure of 48.2% represents the proportion of businesses reporting expansion, so anything below 50% suggests businesses are shrinking.

The survey’s employment gauge fell 2 percentage points to 44%, the lowest reading since August and consistent with gradual but ongoing weakness in the labor market.

There are other signs that the labor situation is worsening heading into 2026.

Trump has pushed hard for energy exploration and increased use of fossil fuels. But an ISM respondent from the oil and coal industry said, “There are no significant changes at the moment, but going into 2026 we expect significant changes in cash flow and headcount. The company has sold most of its free cash-generating operations while offering voluntary severance packages to anyone.”

An electrical equipment, appliances and components business manager said the tariffs had led to a tougher business environment than during the coronavirus crisis.

“Things are tougher than during the coronavirus pandemic in terms of supply chain uncertainty,” respondents said.

conflicting signals

To be sure, broader economic conditions remain fairly stable.

third quarter gross domestic product According to the Atlanta Fed, the annualized growth rate is 3.9%. Additionally, September hiring was stronger than expected, with Nonfarm employment The increase of 119,000 came despite signs that major employers were cutting jobs. For example, Amazon announced significant cuts in late October Up to 30,000 jobsjoining other large employers in announcing layoffs.

Tuesday’s report Organization for Economic Co-operation and Development from 38 countries It said the tariffs have not yet had an impact on the global economy, but warned that the full impact may not be yet to come.

“The impact of rising tariffs has not yet been fully felt by the U.S. economy,” the report from the Paris-based OECD said. “The sharp decline in the value of U.S. imports affected by tariffs” “suggests that tariffs are impacting demand and will continue to weigh on trade volumes after the announced tariffs take full effect,” the report noted.

These risks pose challenges for the labor market in the year ahead.

An economic report released by the Federal Reserve last week also noted that employment has “fell slightly” over the past seven weeks or so, while manufacturers reported that “tariffs and tariff uncertainty remain a headwind.”

The Cleveland Fed’s comments reflected both sides of the tariff issue: “One large retailer has seen its average costs increase by about 20% year over year due to tariffs, and it is trying to determine how to allocate these increased costs. In contrast, another large retailer does not expect further increases in costs, saying the tariff impact has stabilized.”