Regulation imposes heavy costs on the economy and the manufacturing sector is especially burdened by red tape.

As is so often the case, smaller companies are disproportionately harmed. All of which is captured by this visual.

The chart comes from a new report on the manufacturing sector published by the Club for Growth.

Part of the report focuses on how Trump is making progress against red tape, something I wrote about back in March.

But the other part of the report warns that Trump is sabotaging his pro-manufacturing agenda with protectionism, something I wrote about back in January.

Here are some excerpts.

…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)…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. …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… However, the Administration’s own tariff policies have created a significant countervailing burden on the manufacturers that the deregulation was helping. …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. …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 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.

Here’s a chart showing the government data on manufacturing employment.

At the risk of understatement, this validates everyone who warned that higher trade taxes would backfire.

For all intents and purposes, Trump is both Dr. Jekyll and Mr. Hyde on economic issues.

He does some things that are very good. Not only his deregulation agenda, but also the lower corporate tax rate in his first term and the reduction in the tax burden on new investment in last year’s One Big Beautiful Bill.

Yet he offsets the pro-growth impact of those reforms with a protectionist agenda that is economically illiterate (and innumerate).