Federal data show the manufacturing sector shed more than 70,000 jobs in the year ending in November, even as Trump has argued his tariff strategy would revive domestic production.
Economists say import-heavy firms have been squeezed from both ends – unable to fully pass higher costs on to customers while absorbing the impact of tariffs that are the steepest in decades.
Consumer-facing companies selling discretionary goods ranked second in bankruptcy filings, signaling that inflation-weary Americans are pulling back on nonessential spending.
Retailers selling fashion, home décor and accessories have been particularly vulnerable as shoppers prioritize groceries, rent and utilities.
The filings include both Chapter 11 reorganizations and Chapter 7 liquidations, according to S&P data.
Whereas Chapter 11 allows companies to restructure debts while operating, Chapter 7 typically ends with shutdowns and asset sales.
Experts say many companies are deliberately holding the line on prices to avoid losing customers, even if it means bleeding cash.
“These companies are acutely aware of the affordability crisis confronting the average American,” Jeffrey Sonnenfeld, a professor at Yale’s School of Management, told.
“Those with pricing power will pass on the costs over time. Others will fold.”
The year also saw a spike in so-called mega bankruptcies involving companies with more than $1 billion in assets.
Cornerstone Research counted 17 such filings in the first half of 2025 alone — the most in any six-month period since the COVID-19 crisis in 2020.
Several of those involved consumer discretionary brands, including At Home and Forever 21, underscoring how deeply inflation and interest rates have cut into demand and access to capital.
Industrials, however, now appear to be the epicenter of distress.
Tariffs on steel, components and energy-related equipment have hammered manufacturers and suppliers, while policy shifts have undercut parts of the renewable energy sector.
Louisiana-based solar installer PosiGen filed for Chapter 11 in November, citing the rollback of federal clean-energy incentives and steep new tariffs on imported solar equipment.
Effective tariff rates on imported solar cells and panels jumped to about 20% after May, up from less than 5% in prior years, according to federal data analyzed by Michigan State University prof Jason Miller.
Solar importers paid nearly $70 million a month in duties during the second half of the year for common panels, Miller said – a crushing burden for smaller companies.
“That places a lot of strain on cash flow, especially for smaller importers,” Miller told.
“You then combine this with reduced federal incentives that have to be negatively impacting demand, and you have a perfect storm for elevated rates of bankruptcy.”
Transportation companies have also buckled.
Electric truck maker Nikola filed for Chapter 11 in February after struggling to scale production and absorbing tens of millions of dollars in costs tied to a battery recall. The company also faced a $125 million civil penalty from the SEC.
Spirit Airlines sought bankruptcy protection in August, its second filing in less than a year, while Florida-based private jet firm Verijet moved to liquidate.
