WASHINGTON, D.C. — The Coalition for a Prosperous America (CPA) has released a new report from its economics team showing that U.S. manufacturers are beginning to regain ground in their own domestic market as targeted trade enforcement policies take effect.
The report finds that the CPA Domestic Market Share Index (DMSI) – which measures the share of U.S. demand served by domestic producers – rebounded in 2025 as Section 232 tariffs and other industrial policies began to reshape the competitive landscape for American industry. The gains are particularly visible in sectors with strong remaining domestic capacity that were covered by industry-targeted Section 232 tariffs, including primary metals and motor vehicles, where import penetration had previously displaced significant U.S. production.
According to CPA’s new DMSI, the share of the U.S. market supplied by domestic producers rose to 65.6% in the third quarter of 2025, up from 62.1% in the first quarter. The rebound follows a temporary surge in imports in early 2025 as companies rushed to stockpile foreign goods ahead of new tariffs. The report shows that industries covered by Section 232 tariffs led the recovery. Domestic market share in primary metals increased 21.0% between the first and third quarters of 2025, while motor vehicles and parts increased 4.8%. U.S. primary metals output rose by $3.3 billion during the period, while imports fell by $2.9 billion. Auto production also strengthened, with quarterly output rising $15.3 billion, or 8.1%. Recent announcements such as Mercedes-Benz’s $4 billion expansion in Alabama and the shift of additional vehicle production and investment to the United States indicate that manufacturers are beginning to realign supply chains around domestic production.
The analysis builds on recent CPA research showing broader signs of improvement in the U.S. industrial sector. One year after the Trump administration’s “Liberation Day” trade actions, U.S. manufacturing output and investment indicators have begun to strengthen. Industrial production has reached its highest level since 2019, manufacturing activity has expanded for three consecutive months, and manufacturing labor productivity has grown at its fastest annual pace in more than fifteen years.
“Domestic manufacturing decline is not inevitable. The data show that production responds to effective, targeted policy,” said Andrew Rechenberg, Senior Economist at CPA and author of the reports. “These early results suggest that Section 232 tariffs are beginning to work as intended. When policymakers act to correct unfair trade conditions and reduce import distortions, American producers can begin to regain market share and expand output. After years of erosion, some U.S. manufacturing sectors are beginning to recover ground in the domestic market.”
Rechenberg noted that the recovery remains uneven across sectors. Industries with significant remaining capacity, particularly metals and autos, have seen some of the fastest improvements in domestic market share. Despite the encouraging trend, the report cautions that the United States still faces large trade deficits across key manufacturing sectors. Heavily offshored industries such as computers and electronics, and electrical equipment, continue to face deeper structural gaps between growing U.S. demand and current domestic production capacity.
CPA President Jon Toomey said the findings reinforce the need for a long-term industrial strategy centered on restoring domestic production capacity. Key manufacturing sectors will continue to lag without clear trade and industrial policy support. Toomey said the findings demonstrate the need for additional, sector-specific tariff policies to rebuild strategic supply chains and ensure long-term industrial growth.
“These results show that when the United States defends its industrial base, utilizing stronger tariffs to help drive new investment and higher production, American manufacturing can return, it can compete, and it can grow,” said Toomey. “Simply put, American manufacturing responds when policymakers give producers a fair chance to compete. Tariffs and targeted trade enforcement are beginning to restore market conditions that allow domestic producers to invest, hire, and rebuild critical supply chains here at home.”
CPA economists say the early improvement in domestic market share demonstrates that trade policy does influence production decisions relatively quickly when domestic capacity exists, but rebuilding industries that were heavily offshored and seeing corresponding job gains will take time and will require sustained policy support and investment.
The full reports are available on the Coalition for a Prosperous America website:
# # #
