The staffing firm Challenger, Gray & Christmas has revealed that employers were going to slash 10,488 jobs as a result of "trade difficulties."

"Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China," the firm's vice president, Andrew Challenger, said in a statement. "We are continuing to see investor concerns shaking confidence in the market, and employers appear to be cutting workers in response to a slowdown in demand for their products and service."

This view is corroborated by the monthly payrolls report, which highlighted that the manufacturing sector created only 3000 jobs last month. Since manufacturing and retail sectors are more highly correlated to fluctuations in tariffs, these figures are indicative of significant deadweight loss as a result of the trade measures.

"The breadth of the softening among private services was concerning," said Josh Wright, the chief economist at iCIMS, a recruiting-software company. "Manufacturing and especially retail trade were weaker than most, suggesting that trade tensions are impacting these sectors."

This figure is likely to become worse as the trade war escalates, especially given that on September 1 Trump implemented a 15% tariff on about $112 billion of Chinese imports.

However, it is important to note that the survey was designed by tallying the number of firing announcements linked categorically to "tariffs" since 2018. There were 798 cases found last year. This has now increased to 2,076 since last month. This does not necessarily imply that job data is weak; the firings could be linked to early retirements or attrition.

Another point of concern is the impending recession and the psychological impact of the tariffs. Even if the tariffs themselves do not necessarily increase costs by an impressionable amount, employers may perceive them to be a bellwether for what is to come, especially since we are in a late stage economic cycle that is leading into a recession. In order to safeguard against tailwinds, companies in the manufacturing and retail sectors may thus begin to start trimming down workers now, in order to be well prepared for a perceived downturn that is exacerbated by further tariffs and political volatility.

"This will result in an annual cost increase that exceeds $10 million and eliminates our annual profits entirely," said a retail company representative. "If sales decline, overhead and labor costs will need to be reduced, leading to the elimination of jobs, which in turn will make our operation unsustainable."