Highlights

• WSJ reports U.S. manufacturing decline, but January 2026 ISM data shows expansion rebound—suggesting we're in 'first innings' of a slow, capital-intensive turnaround requiring patient investment.
• Modern factory revival will show first in automation and productivity, not mass hiring; tariffs alone can't drive reshoring without domestic rare earth separation, metal-making, and magnet capacity.
• Critical bottleneck: If tariff costs hit magnet makers before U.S. supplies NdPr, Dy/Tb, and qualified magnets domestically, supply chains relocate to input-reliable geographies, not political promises.

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This Rare EarthExchanges™ (REEx) investor brief stress-tests the Wall Street Journal report (opens in a new tab), arguing U.S. manufacturing is shrinking and tariffs aren’t helping. We separate measurable facts (jobs, output, construction) from interpretation (what tariffs “should” do), flag blind spots, and explain what this means for the rare-earth and critical-mineral supply chain—where “made in America” lives or dies on refining, magnets, and automation, not nostalgia.

WSJ’s Point of View

Reporter David Uberti argues the promised tariff-driven manufacturing boom is “going in reverse”: factory employment has fallen, factory activity has been weak for an extended stretch, and policy uncertainty plus higher imported-input costs are weighing on investment.

The REEx Take

Factory data tell a more nuanced story than the headlines suggest. While U.S. manufacturing has endured a prolonged soft patch, Institute for Supply Management figures also show a clear rebound in January 2026, with activity moving back into expansion and new orders and production surprising to the upside—a legitimate “first-inning” signal, not noise.

At the same time, today’s macro backdrop remains statistically foggy: labor data have been distorted by reporting delays and disruptions, making single-month conclusions fragile at best. Layer on the reality that modern factory investment unfolds over years, not quarters, and the Wall Street Journal’s own concession holds true—industrial turnarounds are slow, capital-intensive processes, not overnight political victories. REEx suggests we are in the first innings of a nine-inning game—and that requires patient capital.

Where the Piece Leans Hard, or Leaves Things Out

The scoreboard matters—and payrolls alone don’t tell the whole story. A modern manufacturing revival in 2026 is far more likely to appear first in capital spending, automation, and productivity gains than in mass hiring, a point the WSJ itself acknowledges even as its headline framing leans toward “no jobs equals no comeback.”

Tariffs, meanwhile, are not a standalone lever; they collide with interest rates, currencies, energy costs, permitting timelines, workforce constraints, and—most critically—input availability. When import barriers rise before domestic substitutes are ready, manufacturers get squeezed exactly as described.  This is an ongoing issue REEx has called out.

Finally, the recentcooling in manufacturing construction deserves finer parsing: after a historic surge tied to earlier industrial policy, slower spending may reflect base effects and project sequencing as much as policy failure—distinctions that require category-level analysis across chips, batteries, and metals, not a single aggregated verdict.

Rare Earths Decide Whether “Manufacturing Comes Home”

For rare earths, the bottleneck is not patriotic intent—it’s separation, metal-making, and magnet capacity. If tariffs raise costs for magnet makers and component suppliers before the U.S. can supply NdPr, Dy/Tb, metal/alloy, and qualified magnets domestically, reshoring slows or moves to tariff-advantaged geographies. That’s the uncomfortable truth: supply chains relocate to where inputs are reliable, not where speeches are loud.

Critical QuestionsWSJ Raises but Can’t Answer Yet

1. Will tariff policy stabilize long enough to unlock multi-year capex?
2. Does the U.S. build midstream capacity fast enough to prevent “reshoring” from becoming “nearshoring”? (Note REEx suggests this may need to be subsidized as well.
3. Are we measuring the right scoreboard—automation-heavy output instead of headcount?

Bottom Line

Manufacturing may be “on the rise” in strategic pockets (chips, defense, select electrification), but a broad “Golden Age” is unlikely to look like 1952. If this is baseball, we may indeed be early—but the win condition is inputs + processing + talent + durable policy, not tariffs alone.