Witnesses say tariff uncertainty and volatile trade policy are deterring investment and hiring

Several witnesses and committee members told the Joint Economic Committee that volatile tariff policy and trade uncertainty are significant disincentives to domestic manufacturing investment.

Why it matters: Witnesses said unpredictability in trade policy raises firms’ costs and risk, prompting businesses to hoard inventory, delay capital spending and pause hiring — outcomes that blunt the impact of federal incentives intended to spur domestic production.

Yossi Sheffi described tariff uncertainty as a major near‑term problem: “Reduce tariff uncertainty. It's the uncertainty that's killing us, killing companies,” he said, adding a plea to avoid frequent, retroactive changes: “Don't change it every other Friday, please.” He explained that unpredictable tariffs cause companies to build excess inventory, lose money and freeze hiring and investment decisions.

Committee members added testimony about the macroeconomic effects of tariff volatility. One member noted a sharp decline in U.S. imports in April (an $66 billion decline given in the hearing) and said average tariff levels are at historic highs compared with recent decades. Witnesses agreed targeted trade remedies can be appropriate to address unfair practices, but they cautioned that a tariff‑only strategy without workforce, infrastructure and regulatory support is unlikely to drive sustained reshoring.

Panelists recommended clearer, stable tariff policy, targeted use of tools such as the Defense Production Act where appropriate, and complementary investments in workforce and infrastructure to convert incentives into actual domestic production and jobs.

Ending: Witnesses urged Congress to reduce policy volatility and to pair trade measures with workforce, permitting and infrastructure reforms to make reshoring efforts effective.