The US manufacturing sector has declined for years. President Donald Trump's import duties are unlikely to fix that, but robots and AI can do so.
In a memo on Thursday, Goldman Sachs analysts said what the economy needs is a technical transformation.
“Picking up pace of innovation remains the catalyst most likely to reverse the long-term stagnation of manufacturing productivity,” writes Goldman analysts.
Analysts write that while China's manufacturing growth is damaging US factories, it also plays a role in eroding “easy profits” from the production of computers and electronic devices.
While Trump's tariffs could help boost domestic manufacturing productivity, tariffs alone won't solve the problem, as costs are much lower even after taxation is taken into consideration, Goldman analysts write.
“China is likely to continue to increase exports behind the benefits of cost and industrial policy support,” they added.
AI and robotics are already transforming manufacturing
The economy is in tumultuous thanks to Trump's tariffs and the AI revolution.
In the industry as a whole, companies are Incorporate AI and robotics into your work processes and supply chain.
Amazon has developed and deployed A robot that handles simple tasks At that fulfillment center.
PepsiCo uses AI to improve agriculture and increase profit margins.
Tetra Pak, a Swiss food packaging and processing company, uses AI to create the best cheese recipes that meet the Food and Drug Administration standards.
AI's predictive capabilities can help transform factory maintenance and help businesses analyze historical data and prevent costly breakdowns.
However, productivity gains can come at human costs.
As Business Insider's Aki Ito reported earlier this month, businesses trimming the number of heads of roles that AI can perform, signaling a reshaping of the workforce.
