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When President Donald Trump has talked about the need for higher tariffs on imports of foreign goods because of a decline in American manufacturing, he has often made the claim that “90,000 plants and factories” in the U.S. closed after the North American Free Trade Agreement with Canada and Mexico took effect in 1994. But that figure is questionable, and experts say other factors, such as automation, had more to do with the large decline in U.S. manufacturing jobs than trade.

Data from the Census Bureau’s Business Dynamics Statistics database show that there was a decrease of about 74,000 “manufacturing establishments” in the U.S. between 1995, the peak year for manufacturing after NAFTA went into effect, and 2022, the most recent year for which data is available. Furthermore, about one-quarter of the decline during that nearly three-decade period was in establishments with four or fewer employees — so it’s unclear how many of those truly count as a manufacturing factory or plant. For example, some small-business manufacturers make products while working out of their own homes.

About 2% of the decline was in establishments with at least 500 workers. That’s a drop of 1,346 establishments.

However, over the last month, the president — as well as members of his administration — have used the 90,000 figure several times.

On April 7, when discussing new tariffs on imports that he announced days earlier, Trump said, “We’ve lost 90,000 plants and factories. Think of this, 90,000 — you wouldn’t think it’s possible, 90,000 plants and factories since NAFTA. Which was, by the way, the worst trade deal ever developed, ever had by any country, anywhere, NAFTA.”

A few days earlier, in an April 3 interview, Vice President JD Vance said, “Since NAFTA, in the early ’90s, 90,000 American factories have been closed down. That’s small towns that have been blighted.”

And while speaking with White House reporters on March 7 about an increase in U.S. manufacturing jobs in February, Trump said, “As you probably know, it’s a statistic that everyone talks about, but nobody seems to have done much about. Since the beginning of NAFTA, there’s been 90,000 plants and factories closed in this country.”

When White House Press Secretary Karoline Leavitt made a similar claim about lost factories later in March, the White House told the Washington Post that the figure came from a nearly 5-year-old analysis done by the Economic Policy Institute, a left-leaning think tank.

In that August 2020 report, which was about how Trump hadn’t been successful at reshoring manufacturing jobs during his first presidential term, the EPI said that “the U.S. has suffered a net loss of more than 91,000 manufacturing plants” between 1997 and 2018, the year that the U.S., Canada and Mexico agreed on a new trade deal, known as the USMCA, which officially replaced their NAFTA deal in 2020. The EPI report’s primary source was Business Dynamics Statistics data published by the Census Bureau.

But that figure appears to be out of date. When we tried to confirm that tally using the BDS online tool, we got a smaller decrease — a drop of about 65,000 establishments between 1997 and 2018. Census defines an establishment as “a single physical location at which business is conducted or services or industrial operations are performed.”

Then, when we measured from 1995, which was the NAFTA era’s high point for the number of U.S. manufacturing establishments, and 2022, the most recent year in the BDS database, we came up with a decline of more than 74,000 establishments. (There was a significant decrease in manufacturing establishments in 2020 and 2021 during the COVID-19 pandemic.)

A statistician for the Census Bureau told us that the BDS series figures are updated annually with each new release, which probably explains, at least in part, why our calculations in 2025 were different from the EPI’s in 2020. For its report, the EPI said it also used a different Census dataset to estimate manufacturing losses in 2017 and 2018.

“The 2022 BDS that was released in September 2024 contains the most up-to-date information available,” said the Census official, who told us he also couldn’t reproduce the EPI’s total.

Moreover, thousands of those lost establishments aren’t what many people think of as a manufacturing factory or plant — certainly not the large production facilities that Trump talks about bringing back to the U.S.

The manufacturing sector, according to the North American Industry Classification System, “comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.” Those establishments, which use “power-driven machines and material handling equipment” in the manufacturing process, are often labeled as plants, factories or mills.

“However,” the NAICS says, “establishments that transform materials or substances into new products by hand or in the worker’s home and those engaged in selling to the general public products made on the same premises from which they are sold, such as bakeries, candy stores, and custom tailors, may also be included in this sector.”

Another Census official told us that the bureau doesn’t have a breakdown of how many manufacturing establishments are, or were, factories, plants, mills, home-based or something else.

But we do know from the BDS database that establishments with between one and four workers accounted for about a quarter of the decline from 1995 to 2022. Meanwhile, establishments that employed 500 or more people were less than 2% of the decrease.

As of 2022, about a third of the 268,182 manufacturing establishments in the U.S. had no more than four employees. At that time, a little more than 1% had at least 500 employees.

NAFTA’s Role in Job Losses

As for NAFTA’s role, some critics of free trade agreements have faulted the old trade pact for a decline in U.S. manufacturing jobs. But others disagree that NAFTA is to blame, as Trump has suggested.

“The decline in US manufacturing jobs — something that has been taking place since 1979 — is more a story of technology (robots, computers, and the like) and changing US consumer tastes than it is about trade,” Colin Grabow, associate director at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, wrote in a March 2024 commentary piece for the libertarian think tank. “We know this because while the number of manufacturing jobs has declined, output has risen.”

Grabow argued that automation and economic development have had more to do with lost manufacturing jobs than either Mexico or China, which joined the World Trade Organization in 2001.

Furthermore, in a 2017 report, the nonpartisan Congressional Research Service said that both proponents and opponents of NAFTA made inaccurate predictions about the trade agreement’s impact.

“In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” the CRS said, describing NAFTA’s overall effect on the U.S. economy as “relatively modest.”

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Source: FactCheck