The Great Unwind: Unleashing the Manufacturing Renaissance Deregulation, Tariffs, and the Reform Agenda Ahead

BY DAVID HEBERT, PH.D.

ON BEHALF OF CLUB FOR GROWTH FOUNDATION

Introduction

Despite deep ideological divisions over the scope and purpose of government, policymakers across the political spectrum have found one area of agreement: the need to expand the regulatory state. Both parties’ targets for new regulations differ, but neither has meaningfully shrunk the accumulated mass of rules, regulations, and requirements governing American economic life.

In his first term, President Trump mounted a direct challenge to this by requiring regulators to strike two regulations for every new regulation added. This helped create the first measurable net reduction in regulatory costs in decades.¹ However, because those gains were made through executive action, they could be undone through executive action, making them politically fragile. By the end of President Biden’s term, the regulatory burden had not only recovered but had reached new heights.

Against this backdrop, the Trump Administration’s second term began with a clear mission: to dig the American worker out from under the crushing weight of excessive regulation. They entered office in January 2025 armed with executive orders, an empowered Office of Information and Regulatory Affairs (OIRA), and— crucially—a Supreme Court decision that had stripped federal agencies of the legal armor that had enabled four decades of power grabs by unelected and unaccountable bureaucrats.

This paper does not litigate whether deregulation is good, as the data is unambiguous. Rather, the question is how much has actually changed and what remains to be done? The answer, as of this writing in Spring 2026, is more complicated than Administration supporters or critics would admit.

To answer this question, this paper focuses on the manufacturing industry. Manufacturing isn’t the only industry burdened by overregulation, but it’s the one most disproportionately affected and the one this Administration has most passionately championed.

According to a 2023 report, the National Association of Manufacturers estimates that manufacturing companies paid $29,100 per employee in compliance costs, which is double the regulatory cost of the average U.S. company.² For small manufacturing firms with fewer than 50 employees, that average rises to $50,100 per employee just to comply with federal regulations. These are dollars not going toward wages, equipment purchases, maintenance, or research into the next iteration of American-made products. Instead, this is capital that firms must redirect toward hiring lawyers and accounting firms to produce reports and spreadsheets that are sent to Washington, D.C., where they are reviewed.

Throughout 2025 and into 2026, the Trump Administration has made meaningful progress on deregulation, particularly in environmental permitting and the administrative architecture of the regulatory state. Because of this, manufacturers are playing on a much more level playing field compared to competitors in countries whose regulatory environments are more permissive. This has been unambiguously good for the American economy, particularly manufacturers, who have often struggled under these regulatory burdens. However, the Administration’s own tariff policies have created a significant countervailing burden on the manufacturers that the deregulation was helping. Understanding both sides of this ledger is essential for crafting the reform agenda that American manufacturers actually need.

The Regulatory Hangover Washington Left Behind

Before we assess changes in the status quo, it is useful to describe the status quo and what the Trump Administration inherited when it took office in January 2025.

Over the four years of the Biden Administration, approximately 12,000 rules were finalized, which cost the average American household $47,000 in net present value terms.³⁴ More telling was the expansion of the regulatory state through the Biden-Harris years, expanding its reach far beyond anything Congress had actually authorized and treating statutory ambiguity as blank-check authority. There were also changes under the Biden-Harris Administration when it came to estimating costs and benefits of proposed rules. Specifically, agencies were instructed to place more weight on speculative future climate benefits and less on the immediate compliance costs. As a result, this new framework made virtually any environmental regulation look like a net-positive on paper. This was not cost-benefit analysis — it was cost-benefit theater.

For example, in February of 2024, the Environmental Protection Agency changed its particulate matter standard from 12 to 9 micrograms per cubic meter of air without Congressional direction.⁵ The Biden- Harris EPA, using very generous and highly speculative assumptions, calculated that doing so would save about 4,500 lives and yield up to $46 billion in net health benefits by 2032. However, what they failed to appreciate was the significant cost of implementing such a requirement. Removing 25% of particulate matter from an already very low 12 micrograms per cubic meter of air is incredibly costly. Instead of compelling businesses to clean their air to these higher standards, many simply closed down.⁶ This was especially true in more rural communities, where particulate matter simply is not an issue owing to the fact that there is a low concentration of industry. Instead, to the extent that there were health benefits, they were concentrated in urban and high-density areas while the costs were borne by the more rural communities.⁷

Meanwhile, the courts had also been taking stock of regulatory overreach, a position that culminated in the now-famous Loper Bright Enterprises v. Raimondo Supreme Court case in June of 2024.⁸ This case overturned the Chevron doctrine, a 1984 precedent that required courts to defer to agency interpretations of ambiguous statutes, which let agencies effectively write their own rules interpreting the laws Congress had enacted. This was the cornerstone of regulatory expansion for 40 years, and its overruling was a massive shift in the regulatory architecture that had come to dominate federal agencies. Now, federal bureaucrats could no longer simply declare what they thought the law ought to be and expect courts to simply go along with it.

Against that backdrop, manufacturing did post modest employment gains, but these owed far more to the lifting of pandemic-era restrictions than to anything the Biden-Harris Administration had done right. From the day they took office to the day they left, manufacturing employment increased from 12.17 million to 12.67 million, representing about 500,000 additional manufacturing jobs.⁹ While the Biden-Harris Administration is quick to point out that they added over half a million manufacturing jobs in their single term, it is useful to compare this to pre-pandemic levels. In February of 2020 (i.e., the last employment data before the pandemic), manufacturing employment stood at 12.74 million, indicating that the Biden-Harris Administration hadn’t even recovered to pre-pandemic levels. (Figure 2)

While some would tout this growth, both in terms of workers and value added, as a success of the Biden-Harris agenda, a more accurate reading is that the manufacturing sector, like all sectors of the American economy, is incredibly resilient.¹⁰ This is, in part, thanks to the ingenuity of the American entrepreneur and the decades of capital investment and technological improvements made by firms. Because of these investments, the American worker is not easily disrupted by even aggressive regulation in the short run. (Figure 3)

Manufacturing productivity data during the Biden- Harris years also reflects the genuine capability of the American worker to succeed in spite of burdensome regulations.¹¹ As factories were being shuttered in response to the pandemic, only the most productive were able to stay open, as reflected by the rather large spike in output per hour beginning in 2020 Q2. Then, as pandemic restrictions were gradually lifted and more firms were able to open, average productivity began to fall. Again, this is average productivity. Falling averages can easily be accompanied by increasing totals. For example, when my wife (a surgeon) and I got married, the average per-person income in her household fell despite the fact that total household income rose. (Figure 4)

This is exactly what we see during the pandemic years in manufacturing. The average productivity of the remaining workers was quite high. This didn’t happen because people suddenly got better at their jobs, but because the least productive plants actually shut down, and output fell with them.

The lesson from the Biden-Harris years is not that their policies were successful. Instead, American manufacturing is resilient enough to perform remarkably well despite regulatory headwinds. Regardless, bad policy does take its toll and is more accurately measured in unrealized potential: factories never built, jobs never created, and investment directed elsewhere. The regulatory hangover described here is not the story of a sector that collapsed or is “dead.” It’s the story of a sector that could have been significantly stronger.

The Deregulatory Efforts and Progress

Within 48 hours of taking office, the Trump Administration signaled its deregulatory intent clearly with Executive Order 14192, aptly titled “Unleashing Prosperity Through Deregulation.”¹² The order identified:

The ever-expanding morass of complicated Federal regulation imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness. Despite the magnitude of their impact, these measures are often difficult for the average person or business to understand, as they require synthesizing the collective meaning not just of formal regulations but also rules, memoranda, administrative orders, guidance documents, policy statements, and interagency agreements that are not subject to the Administrative Procedure Act, further increasing compliance costs and the risk of costs of non-compliance.

Acknowledging the problem of overregulation is one thing and is something that Washington has done plenty of in the past. Doing something about it is entirely different. After seeing the successes of deregulation in Trump’s first term, the Administration built on them. Also in Executive Order 14192, the Administration created a regulatory cap for Fiscal Year 2025. This cap would require executive departments and agencies to “identify at least ten existing regulations to be repealed” for every new regulation.

Where Executive Order 14192 set a forward-looking cap, Executive Order 14219 went back through the existing stock of rules and asked a more fundamental question: were these regulations lawful to begin with?¹³ Specifically, this Executive Order directed agencies to identify all regulations that exceeded their statutory authority or conflicted with recent Supreme Court decisions and to begin the process of rescission.

Calvin Coolidge, one of the few presidents to preside over a genuine reduction in the size and scope of the federal government, understood this instinctively, once writing to his father that, “it is much more important to kill bad bills than to pass good ones.” The principle applies with equal force to regulation. The goal of a well-functioning regulatory system is to prevent bad ones from taking root in the first place. An OIRA review requirement does not add a new layer of bureaucracy. It adds a check that, in a regulatory environment still carrying the accumulated weight of decades of overreach, is precisely what the system needs.

The result of these Executive Orders has been very clear. In OIRA’s Final Accounting for Fiscal Year 2025, OIRA reported that “agencies issued just 5 significant regulatory actions against 646 deregulatory actions.”¹⁴ This resulted in a 129-to-1 ratio, far exceeding the 10- to-1 goal. George Washington University’s Regulatory Studies Center, one of the most respected sources for regulatory analysis, released its own findings.¹⁵ While their appraisal of the Administration’s deregulatory efforts is qualified and more muted, it is nonetheless notable coming from a nonpartisan institution: “it’s clear that the Administration has prioritized reducing regulatory output, and in that regard, the results are substantive.”

Deregulation of this magnitude warrants both recognition and precision because the stakes for American manufacturers are too high. The Administration reports that they have reduced net costs of regulations by $211.8 billion, a figure that represents a meaningful shift in the compliance burden on American businesses.¹⁶ The composition of those savings, however, is worth understanding.¹⁷ For example, the repeal of FinCEN’s Beneficial Ownership Information reporting requirements alone accounted for $128.6 billion, representing 60.7% of the total reported savings.¹⁸ Meaning, one rule change is doing most of the work. That does not diminish the value of the repeal, but it does suggest the broader deregulatory agenda has more ground to cover than the top-line figure implies.

The 129-to-1 ratio deserves scrutiny on its own terms. The Administration points to “646 deregulatory actions,” but most of these are relatively minor in that they include “repealing regulations that were no longer in effect as well as guidance documents, policy letters, and internal agency materials.”¹⁹ By contrast, its count of new “regulatory actions” was limited to those with a significant effect on the economy, meaning regulations with an economic impact of $100 million annually.

This produces an expansive definition of “deregulatory actions” but a relatively narrow definition of “regulatory actions.” Meaning, the numerator is broad; the denominator is narrow. This asymmetry does not invalidate the Administration’s deregulatory record, but it does mean the “129-to-1” ratio is better understood as a measure of regulatory activity than of regulatory burden.

The more meaningful question to ask is: how much did the actual cost of compliance fall, and for whom? Independent analysts and future Administrations would be better served by a methodology that holds both sides of the ledger to the same standard. That standard does not yet exist, and its absence leaves the true magnitude of regulatory relief genuinely difficult to assess.

The Tariff Contradiction

The tailwinds of deregulation are clearly a positive for manufacturers. However, the sector also faces significant headwinds from 2025 trade policies, specifically tariffs. The deregulation agenda and the tariff agenda are not only different policies but represent different philosophies. Deregulation rests on two ideas. First, that American manufacturers are extraordinarily productive and need no protection to compete with the rest of the world, only the freedom to do so. Second, and more fundamentally, it represents a form of humility, acknowledging that the government does not possess the knowledge or standing to pick winners and losers, but is instead removing barriers for the American entrepreneur, trusting markets to do what the government cannot.

Tariffs and other forms of protectionism, however, rest on the opposite premise. Tariffs implicitly underestimate American manufacturers, suggesting the sector cannot compete on the global stage without protection from foreign competition. They reflect a form of arrogance, assuming the federal government knows which industries ought to survive, which industries need the protection, and how much protection to give them.

The tariffs that took effect on April 2, 2025—otherwise known as Liberation Day—were not applied with the surgical precision required of such an intervention in the economy. Those reciprocal tariffs have since been struck down by the Supreme Court and partially replaced by a roughly 10% across-the-board tariff under Section 122. But the Section 232 tariffs on steel, aluminum, and copper remain firmly in place, and it is those, levied directly on the raw inputs American manufacturers depend on, that continue to do the sector the most harm. The American manufacturing sector is arguably the most deeply integrated into global supply chains of any U.S. industry, which is why we have serious debates about what constitutes an “American-made” car in today’s economy. The United States specializes in advanced, high-value manufacturing, and while we do produce some of our own steel and aluminum, the bulk of American manufacturers rely on access to imported materials. When those inputs are taxed, the cost does not fall on foreign competitors but on the domestic manufacturers who need them. The foreign steel mills are not paying the steel tariffs. Those are being paid by the American automakers, the American appliance companies, and the American machinery producers, who then pass some of them on to consumers in the form of higher prices. This decreases the demand for the now more expensive American-made products, which leads inexorably to reduced employment.

The evidence is crystal clear. Manufacturing employment fell by approximately 108,000 jobs in 2025, a stark contrast to the deregulatory gains being recorded in the same period. The ISM Manufacturing Purchasing Managers’ Index, one of the most closely watched indicators of sector health, saw ten consecutive months of contraction—a sustained decline that has historically signaled serious structural stress. Analyses from the Federal Reserve Bank of Kansas City, the Yale Budget Lab, and the Plymouth Institute for Free Enterprise all confirmed the pattern: sectors with higher import exposure experienced meaningfully greater reductions in hiring compared to those less exposed to tariffs.²⁰²¹²²

The pattern is as old as protectionism itself. A small, politically visible industry receives protection while a larger, less organized set of industries that depends on the protected industry gets taxed. The winners are concentrated and loud; the losers are dispersed and quiet. The 2018 steel and aluminum tariffs demonstrated this dynamic. Initially, roughly 1,000 jobs were saved in these protected industries—a factory or two that didn’t close, a benefit that could be pointed to and photographed. But at the same time, higher prices for steel and aluminum led to the destruction of about 75,000 jobs in downstream industries. While this number is large in aggregate terms, it was spread thinly across the entire country.

The defenders of tariffs argue that the short-term pain is the price of long-term gain. The theory goes that if we accept the disruption now, then manufacturers will reshore production, rebuild domestic capacity, and the country will emerge stronger. Unfortunately, that theory has not played out.

The steel industry is the most instructive case. The United States has protected it, in one form or another, since 1970, and the industry is not stronger for it. Protected industries, shielded from competition, do not have the same incentive to innovate, invest in productivity, or drive down costs. Over time, they atrophy, which is exactly what the long history of the American steel tariffs demonstrates. Whatever narrow benefits tariffs deliver accrue in the short term, before companies have fully adjusted, before retaliating countries have reoriented their own supply chains, and before the downstream damages have fully compounded. Those early, concentrated gains to the protected sector are real, if modest. But they do not last.

Firms that rely on protected inputs, however, have every incentive to find ways to drive down costs and innovate around the now-more-expensive materials. As a result, they find alternatives and ways to economize the use of these materials. The canning industry has shifted toward taller, narrower cans. Because the tops and bottoms contain most of a can’s aluminum, a smaller-diameter end uses less metal, so each can costs less to produce. By reducing the amount of aluminum they purchase, the canning industry can realize significant savings. However, this also means that there is an overall decline in purchasing volume in the aluminum sector. With the decline in purchasing volume, the aluminum sector is already experiencing a decline in employment.²³ The protected industry did not gain a stronger customer but a more efficient one that needs less of its output.

Once these supply chains shift, they do not easily shift back. These losses compound with time. Manufacturers who can no longer afford domestic inputs find other, alternative sourcing arrangements. Markets lost to foreign competitors do not automatically return if tariff rates eventually come down. Manufacturing plants already being built in other countries will not be packed up and relocated to the U.S. Trade deals among other countries that exclude the U.S. will not be canceled. Manufacturing workers who leave the sector for other employment take with them their skills and knowledge, which are not easily replaced. Each of these adjustments is individually rational and collectively irreversible. The longer tariffs remain in place, the deeper these realignments become.

There is no redemption arc for tariffs on the horizon. This is not medicine that requires time to heal a sick patient. It is a wound that festers and deepens the longer the tariffs remain in place. The short-term gains for the protected sectors are already fading while the long-term losses in downstream industries are only beginning to accumulate. The evidence of the harms of protectionism is clear, even if trade policy debates haven’t caught up yet. The costs are real; they are compounding, and they fall squarely on the manufacturers they were meant to liberate.

States: Laboratories of Liberty

In a 1932 Supreme Court case, New State Ice Co. v. Liebmann, Justice Brandeis, in his dissent, observed that “a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”²⁴ To that end, several states have undertaken such experimentation, and the results are instructive.

Two deserve particular attention.

1. Idaho: Zero-Based Regulation

Most government-created rules are viewed as permanent until actively removed. Idaho reversed that presumption in 2019 when Governor Brad Little launched the Zero-Based Regulation initiative.²⁵ Under the ZBR, all regulatory rules are automatically eliminated at the end of a five-year review cycle unless actively re-justified. Justification, further, entails not passive reaffirmation but substantive comparison to peer jurisdictions.

The results have been substantial. Idaho has eliminated 38% of its regulations, reducing its regulatory code from 8,553 pages in 2018 to 5,318 pages in 2024. Some eliminations were relatively benign, such as the elimination of rules governing a lottery game show that never actually aired (Rule 203).²⁶ Others were consequential, such as the Idaho Board of Pharmacy trimming its rule book from 100 pages to just 26.²⁷ As a result, large pharmaceutical distribution companies chose to locate in the state, citing the state’s regulatory environment as a deciding factor. This led to “increased pharmacy services, improved access, and significant industry investments” in Idaho. Leaner rules produced tangible economic results.

2. Michigan: Where Government Picks Winners

If Idaho shows what happens when a state gets out of the way, Michigan shows what happens when it insists on steering an economy. As a matter of comparison, Michigan is not a heavily regulated state. The Mackinac Center finds that Michigan imposes less red tape than its Great Lakes counterparts, beating states like Illinois, Indiana, Ohio, and Wisconsin almost across the board.²⁸ In a QuantGov study, they find that Michigan is the ninth least-regulated state in the country.²⁹ Clearly, regulation is not holding Michigan back in any meaningful way. But if we look at economic performance, Michigan clearly lags behind.

Where Idaho trusted the market to sort winners from losers and largely got out of the way, Michigan spent decades trying to pick winners itself through targeted tax credits and subsidies to companies that Lansing officials judged worthy of public money. This is the same impulse that animates tariff policy, namely that government simultaneously knows which industries deserve to grow and is competent to make it happen through policy.

Michigan’s flagship incentive program, the Michigan Economic Growth Authority (MEGA), has had a disastrous record. A 2005 study found that for every $123,000 in tax credits offered, only a single construction job was created.³⁰ The study also found that all of those jobs created through MEGA tax credits had vanished within two years of the tax credits being dispensed. A follow-up study in 2009 found even worse results: every $1 million in MEGA manufacturing credits awarded in a county was associated with the loss of 95 manufacturing jobs in that county. By pulling capital and labor toward politically favored firms and away from productive uses, the MEGA tax credits amounted to something worse than nothing.

In 2008, Michigan officials decided that what the state really needed was a burgeoning film industry. Seven years and $500 million in tax incentives later, the state had just 78 more film jobs than it had when it started.³¹ From 2000-2020, Michigan’s incentive programs were promised to bring tens of thousands of jobs to the state. However, for every 1,000 jobs promised, only 90 actually materialized, giving Lansing officials a 91% failure rate.³²

Idaho asked to justify the continued existence of regulations and then let entrepreneurs do the rest. As a result, pharmaceutical manufacturers and distributors showed up on their own. Michigan tried to legislate prosperity, spending billions of dollars to lure the firms that Lansing officials wanted while raising costs on the firms that it already had. Idaho trusted the market to pick winners and losers and got investment that it never had to pay for. Michigan insisted on picking winners itself and got losses. The Brandeis vision of “states as laboratories” cuts both ways, allowing us to see which experiments succeeded and to use the rest as warnings.

Anti-Deference Laws in the States

The Loper Bright decision did more than reshape federal law; it created a template. Since the ruling effectively ended automatic judicial deference to agency interpretations at the federal level, nine state legislatures have moved to require their own state courts to independently interpret law as well: Idaho, Kentucky, Texas, Oklahoma, Louisiana, Missouri, Kansas, Alabama, and Georgia.³³ Each represents a structural reduction in the ease of regulatory overreach at the state level.

However, several states maintain Chevron-style deference to agency interpretations. And in each of these cases, regulatory overreach remains structurally easier than it should be. These are clear candidates for future reform. Idaho has demonstrated that genuine deregulation can be achieved, that its benefits are measurable and will not cause irreparable harm to the state and its people. With the government no longer standing in the way of success, the private sector will respond to regulatory certainty with exactly the kind of long-term investment that manufacturing communities need.

A Reform Agenda for Federal Policymakers

The deregulatory progress to date is the foundation for the future, not the finish line. The victories on this front must be codified so that they aren’t easily revoked by future Administrations. Executive orders can be rescinded, guidance can be rewritten, and regulatory momentum can reverse, as demonstrated in the years following Trump’s first term. To that end, the four federal recommendations that follow are aimed at converting this momentum into durable, institutional change:

1. Establish a Congressional Regulation Office

Congress currently has the Congressional Budget Office, a nonpartisan, independent entity that scores the impact of legislation on the federal budget, yet no equivalent institution exists to independently evaluate the economic costs and benefits of proposed regulations on businesses and the American people. An independent Congressional Regulation Office would correct that imbalance, giving lawmakers the analytical infrastructure to exercise meaningful oversight of the rulemaking process and creating an institutional constituency within Congress for regulatory rigor.

2. Require Genuine Cost-Benefit Analysis

The Biden Administration’s 2023 guidance on regulatory analysis systematically distorted the analytical framework toward justifying new rules by allowing agencies to use speculative future climate benefits to outweigh immediate, measurable compliance costs. This dysfunction exposes the deeper problem: there is no formally defined way to assess regulatory impact. Congress should establish one, standardizing the methodology used. Importantly, this should require marginal analysis, not merely asking whether aggregate benefits exceed aggregate costs, but instead asking whether each additional regulation confers benefits commensurate with additional compliance costs. The EPA’s proposed tightening of emissions standards illustrates why this is important. Air quality in the U.S. has improved dramatically since the year 2000. Additional gains are possible, but the marginal gains, such as going from 12 to 9 micrograms per cubic meter, come at a greater cost to American businesses and the American people. A methodology that ignores that curve is not analysis but advocacy.

3. Establish a Regulatory Budget

Just as Congress must operate within a fiscal budget, regulatory agencies should be required to evaluate the cumulative compliance costs that they impose on the American economy. A statutory regulatory budget would require any agency seeking to impose a new regulatory burden to first identify an equal or greater burden to eliminate. This would accomplish two things simultaneously: institutionalize the 10-to-1 ratio as a permanent structural requirement rather than a single-term policy, and force agencies to make explicit trade-offs rather than treat each new rule as a cost-free addition to an already overburdened system. Regulatory budgeting has attracted bipartisan interest in the past. The current political environment offers a rare opportunity to codify it into law.

4. Eliminate the Tariffs

A coherent pro-manufacturing agenda cannot simultaneously argue that American manufacturers are capable of outcompeting the world and that they require protection from it. These two positions are in direct conflict. To resolve it in favor of the manufacturers this agenda is meant to serve, the Section 232 tariffs on steel, aluminum, and copper should be phased out, along with the across-the-board tariff that replaced the struck-down Liberation Day duties; trade agreements that open foreign markets to American exports should be negotiated; and any remaining trade interventions should be reserved for genuine, specific national-security concerns with clear, enforceable sunset conditions. The goal is not to protect American manufacturers from the world. The goal is to unleash them upon it.

Conclusion

The American worker is extraordinary, producing more value per hour than manufacturing workers anywhere else in the world. China is often heralded as a manufacturing superpower, but its supposed strength comes from the sheer number of people they employ in manufacturing. As of this writing, China employs 212 million³⁴ people in manufacturing and produces roughly double the manufacturing output of the U.S.—yet the U.S. employs a mere 12.6 million people in manufacturing. In other words, the American manufacturing worker is at a minimum eight times as productive as a Chinese counterpart. This is not a coincidence but the compounded return on decades of investment in technology, physical capital, and human ingenuity. This incredible success has endured decades of policy headwinds, including regulations that unnecessarily raised costs, protracted permitting processes that delayed investments, and a legal structure that gave unelected bureaucrats more authority over economic activity than the elected officials who were supposed to write the laws.

The deregulatory record of the Trump Administration represents a genuine and meaningful improvement. Its magnitude may be debatable, but its direction is not. The EPA rollbacks, the structural changes to OIRA oversight, and the foundation laid by Loper Bright have produced the most favorable regulatory environment for the U.S. economy in decades. These are real contributions that can benefit the manufacturing sector for years, but executive orders are not statutes. The gains documented in this paper remain vulnerable to reversal, which is why the reform agenda is necessary.

Yet the 2025 data does not describe a sector that has been unleashed, but one hamstrung. Employment fell by 108,000. The Institute for Supply Management reported ten consecutive months of contraction. The cause is identifiable: tariffs and other forms of protectionism are working in direct opposition to the deregulatory agenda, imposing downstream damage to the auto sector, the machinery sector, and every manufacturer that uses steel, aluminum, or machined parts. Whatever short-term benefits the protected industries captured in the early months of the tariff regime are fading away.

American manufacturers do not need Washington to protect them from the rest of the world. They need Washington to stop standing in their way. The regulatory burden has been reduced, and there is strong reason to believe that this is just the beginning of a longer arc of reform. The recommendations in this paper are designed to extend that arc: to convert executive momentum into statutory permanence, to build the institutional infrastructure that makes regulatory accountability self-sustaining, and to remove the self-imposed trade barriers that undermine every deregulatory gain. The American manufacturing sector has outperformed every expectation under far worse conditions than these. Given the freedom to compete, it will do so again.

Endnotes

1 “Trump Signs Executive Order Requiring That for Every New Regulation, Two Must Be Revoked”, Politico, January 30, 2017, https://www.politico.com/story/2017/01/trump-signs-executive-order-requiring-that-for-every-one-new-regulation-two-must-berevoked-234365

2 Nicole V. Crain and W. Mark Crain, The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business (Washington, DC: National Association of Manufacturers, October 2023), https://nam.org/wp-content/uploads/2023/11/NAM-3731-Crains-Study-R3-V2-FIN.pdf.

3 Office of Advocacy, U.S. Small Business Administration, “Trump’s Regulatory Rollback: Saving Americans $907 Billion and Counting”, November 19, 2025, https://advocacy.sba.gov/2025/11/19/november-19-2025-testimony-trumps-regulatory-rollbacksaving-americans-907-billion-and-counting/

4 Committee to Unleash Prosperity, “The Cost of the Biden-Harris Regulatory Agenda”, July 2024, https://committeetounleashprosperity.com/wp-content/uploads/2024/07/240724_CTUP_BidenHarrisRegulations_Doc.pdf

5 U.S. Environmental Protection Agency, “EPA Finalizes Stronger Standards for Harmful Soot Pollution, Significantly Increasing Health and Clean Air Protections”, news release, February 7, 2024, https://www.epa.gov/newsreleases/epa-finalizes-stronger-standardsharmful-soot-pollution-significantly-increasing

6 U.S. Environmental Protection Agency, “EPA Launches Biggest Deregulatory Action in U.S. History”, news release, March 12, 2025, https://www.epa.gov/newsreleases/epa-launches-biggest-deregulatory-action-us-history

7 Cato Institute, “Clearing the Air on Particulate Matter Regulation”, Cato at Liberty (blog), https://www.cato.org/blog/clearing-airparticulate-matter-regulation

8 Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf

9 Federal Reserve Bank of St. Louis, “All Employees, Manufacturing [MANEMP]”, FRED, https://fred.stlouisfed.org/series/MANEMP

10 Federal Reserve Bank of St. Louis, “Real Value Added: Manufacturing [RVAMA]”, FRED, https://fred.stlouisfed.org/series/RVAMA

11 Federal Reserve Bank of St. Louis, “Manufacturing Sector: Labor Productivity (Output per Hour) [PRS30006091]”, FRED, https://fred.stlouisfed.org/series/PRS30006091

12 “Unleashing Prosperity Through Deregulation”, Exec. Order No. 14192, 90 Fed. Reg. 9065 (January 31, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-prosperity-through-deregulation/

13 “Ensuring Lawful Governance and Implementing the President’s ’Department of Government Efficiency’ Regulatory Initiative”, Exec. Order No. 14219 (February 19, 2025), https://www.whitehouse.gov/presidential-actions/2025/02/ensuring-lawful-governance-andimplementing-the-presidents-department-of-government-efficiency-regulatory-initiative/

14 Office of Information and Regulatory Affairs, “Final Accounting for Fiscal Year 2025 under E.O. 14192”, 2025, https://www.reginfo.gov/public/pdf/eo14192/Final_Accounting_for_Fiscal_Year_2025_under_EO_14192.pdf

15 Regulatory Studies Center, “Behind the $211.8 Billion: Evaluating EO 14192’s Deregulatory Accounting”, George Washington University, March 2026, https://regulatorystudies.columbian.gwu.edu/behind-2118-billion-evaluating-eo-14192s-deregulatoryaccounting

16 The White House, “President Trump’s Deregulation Delivers $211.8 Billion in Savings”, December 2025, https://www.whitehouse.gov/briefings-statements/2025/12/32750/

17 Regulatory Studies Center, “Behind the $211.8 Billion”.

18 Clyde Wayne Crews Jr., Ten Thousand Commandments 2026 (Washington, DC: Competitive Enterprise Institute, 2026), https://cei.org/studies/ten-thousand-commandments-2026/

19 “Behind Trump’s Deregulation Numbers, a Reliance on Process Changes”, Government Executive, April 2026, https://www.govexec.com/management/2026/04/trump-deregulation-numbers-process-changes/413062/

20 Federal Reserve Bank of Kansas City, “Higher Tariffs Might Have Created Headwinds to Employment Growth in 2025”, Economic Bulletin, 2025, https://www.kansascityfed.org/research/economic-bulletin/higher-tariffs-might-have-created-headwinds-toemployment-growth-in-2025/

21 The Budget Lab at Yale, “Tracking the Economic Effects of Tariffs”, https://budgetlab.yale.edu/research/tracking-economic-effectstariffs

22 Plymouth Institute for Free Enterprise, “Tariffs Tank Employment: Assessing One Year of Liberation Day Evidence”, Advancing American Freedom, 2026, https://advancingamericanfreedom.com/tariffs-tank-employment-assessing-one-year-of-liberationdayevidence/

23 Can Manufacturers Institute, “Can Manufacturers Respond to Trump 232 Tariffs on Steel and Aluminum”, https://www.cancentral.com/can-manufacturers-respond-to-trump-232-tariffs-steel-aluminum/

24 New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting), https://supreme.justia.com/cases/federal/us/285/262/

25 Competitive Enterprise Institute, “The Beauty of Regulatory Sunsets”, https://cei.org/studies/the-beauty-of-regulatorysunsets/

26 Idaho Administrative Rules, “Rule 203” (lottery game rules), Idaho Division of Financial Management, https://proddfmmainsa.blob.core.windows.net/dfm-admin-website/rules/2014/52/0103.pdf

27 Alex J. Adams et al., “Idaho’s Standard-of-Care Approach to Pharmacy Regulation”, Journal of the American Pharmacists Association, https://pmc.ncbi.nlm.nih.gov/articles/PMC12509714/

28 “Could Be Worse: Study Finds Michigan’s Regulatory Burden on Business Less Than Nearby States”, Michigan Capitol Confidential, https://www.michigancapitolconfidential.com/could-be-worse-study-finds-michigans-regulatory-burden-onbusiness-less-than-nearby-states

29 QuantGov, “State RegData: Definitive Edition”, Mercatus Center, https://www.quantgov.org/state-regdata-definitiveedition

30 Michael D. LaFaive and Michael Hicks, MEGA: A Retrospective Assessment (Midland, MI: Mackinac Center for Public Policy, 2005), https://www.mackinac.org/archives/2005/s2005-02.pdf

31 Michael D. LaFaive, “Corporate and Industrial Handouts: A Year-End Update”, Mackinac Center for Public Policy, https://www.mackinac.org/corporate-and-industrial-handouts-a-year-end-update

32 James Hohman, Front Page Failures (Midland, MI: Mackinac Center for Public Policy, 2024), https://www.mackinac.org/s2024-14

33 “A Year After Loper Bright, Part II: States Follow Suit”, K&L Gates, Litigation Minute, October 13, 2025, https://www.klgates.com/Litigation-Minute-A-Year-After-Loper-Bright-Part-II-States-Follow-Suit-10-13-2025

34 Dave Hebert and Peter C. Earle, “The Truth about Chinese Manufacturing,” Civitas Institute, November 2025, https://www.civitasinstitute.org/research/the-truth-about-china.