Oregon’s manufacturing workforce is shrinking.
Last summer, more than 187,000 people in Oregon’s 2 million person workforce belonged to the manufacturing sector — a varied set of industries that creates new products from raw materials.
A year later, employment in manufacturing is down 5%, or 9,400 workers in the state.
“That’s the largest decline of any sector in Oregon’s economy over the past year,” Gail Krumenauer, state of Oregon employment economist, said.
“If we look back a little bit further, say 2022, so three years ago, employment was still trending up towards the most recent peak — for manufacturing that would have been closer to 195,000 jobs. So we’ve seen pretty notable declines over the past few years.”
Overall, Oregon has lost nearly 25,000 jobs in the last year, and the state’s workforce has dropped to about 1.97 million people. Health care and social assistance are the most consistent growth sector for jobs of late, currently with 312,000 workers in Oregon.
A combination of local, national and international factors have put pressure on Oregon manufacturers leading up to 2025. Starting in April, the Trump administration pivoted to its solution to boost manufacturing employment across the country: tariffs.
Tariff proponents, like President Trump, argue that raising the import tax on foreign goods will force companies and consumers to switch to items made in the U.S.
But since a widespread 10% tariff went into effect, many manufacturers in Oregon say import taxes are raising the cost of doing business.
More so, the back-and-forth between the Trump administration and other countries has infused a high level of uncertainty, causing companies and individuals to pull back on spending. That’s translating into fewer orders for manufacturers.
The latest twist came on Friday when an appeals court upheld a lower court’s decision deeming the bulk of Trump’s tariffs illegal. However, the court allowed the taxes to stay in place until October, paving the way for consideration from the U.S. Supreme Court.
3 ways tariffs are already affecting one manufacturer
Portland Garment Factory manufactures clothing, shoes and accessories for clients of all sizes. The company has worked with major Oregon names like Nike, Tillamook, Intel, and the Oregon Museum of Science and Industry, or OMSI.
Tariffs are squeezing Portland Garment Factory at three stages, said owner and founder Britt Howard.
First, materials are going up in price. Then, customers are ordering less due to cost concerns. And third, reciprocal tariffs from other countries are causing her clients who sell internationally to order less.
Portland Garment Factory orders through U.S. suppliers, Howard said, but those businesses are often sourcing from another country.
“Especially at the color and the size and the capacity that we need things,” Howard said. “Things like velcro, elastic, twill — in the color that the client wants — webbing, buckles, molded plastic pieces that go into other components of a greater garment or jacket, those aren’t made in this country.”
That means her suppliers are raising costs to cover the import taxes they pay to U.S. Customs and Border Protection when a shipment arrives at the port of entry.
“Then, there’s a squeeze in the middle on people’s budgets,” Howard said.
Orders are going down as companies trim costs to account for rising costs. For Portland Garment Factory, it means smaller orders, leaving less work. Howard has had to cut hours among her staff of less than two dozen.
For ongoing contracts, Howard is already locked into a price per item. The cost to make that item may go up, but the money Portland Garment Factory collects for it stays the same.
Finally, Howard said her clients may pull back if they export any items out of the U.S. In response to the Trump administration policies, other countries have implemented their own tariffs on U.S. goods.
“Once we manufacture those products here, we are a co-packer in some capacity so we will ship them on behalf of our client,” Howard said. “And our client is paying reciprocal tariffs on the products that are going out of the United States.”
Clothing and other fabric-based products are already challenging to produce domestically. Trade policy changes in the 1990s resulted in big clothing makers moving the labor-intensive work to countries where they could pay workers less and avoid other regulations. It drove down prices, making it harder for U.S.-based clothing makers to compete.
“As much as our members would love to manufacture more footwear and apparel in the U.S., closer to our U.S. consumers, it is simply not feasible to do so at scale right now due to significant supply chain, labor, and cost constraints,” the American Apparel and Footwear Association and other national apparel trade groups wrote in a letter to President Trump in May.
“Tariff policy cannot overcome these obstacles, especially when it is imposing new costs on existing manufacturers in our industry,” the association continued.
Employment economist Krumenauer said tariffs could ramp up pressure on manufacturing, but it’s still too early to tell if trade tensions are a main driver.
“One of the things that I’m looking at going forward,” she said, “is if we’re seeing a larger number of folks coming in for first-time, or initial, unemployment insurance claims who are coming from the manufacturing sector.”
So far, most weeks this year have seen between 400 and 800 initial unemployment insurance claims from people who lost their jobs at a manufacturing company.