Tariffs won't bring manufacturing jobs back to America, Wells Fargo analysts say

Published: Friday, May 23, 2025 at 2:31 am

Tariffs Alone Won't Revive US Manufacturing Jobs, Wells Fargo Analysts Say

President Trump's strategy of using tariffs to bring manufacturing jobs back to the United States faces significant challenges, according to a recent report from Wells Fargo economists. Despite some high-profile investments from companies like Nvidia and Apple, the report suggests a "meaningful increase" in factory jobs is unlikely in the near future.

The Wells Fargo analysis points to several hurdles. High labor costs, a shortage of skilled workers, and subdued population growth are key factors hindering job growth. The report also notes that the current level of tariffs, while the highest since the 1940s, may not be enough to incentivize companies to significantly expand domestic production. The bank estimates that a staggering $2.9 trillion in net new capital investment would be needed to return manufacturing employment to its 1979 peak of 19.5 million jobs, which would require adding roughly 6.7 million jobs.

The report highlights the skills gap as a major concern. The new jobs will require different skills than those previously lost, and there are not enough skilled workers to fill the positions. This is further supported by the fact that Taiwanese chipmaker TSMC delayed the opening of its Arizona chip factory due to a shortage of skilled workers. A report from Deloitte and the Manufacturing Institute also found that nearly half of the 3.8 million new manufacturing jobs anticipated by 2033 could remain unfilled due to skill gaps and other population factors.

The Wells Fargo report concludes that tariffs must be high enough and sustained long enough to make domestic production competitive. However, the report also notes that the current administration could quickly dial back prevailing duties if the economic or political costs are deemed too high.

BNN's Perspective: While tariffs can play a role in shaping trade policy, this report underscores the complexity of revitalizing American manufacturing. Simply imposing tariffs is unlikely to be a silver bullet. Addressing the skills gap, managing labor costs, and fostering a business-friendly environment are crucial for long-term success. A balanced approach that considers both protectionist measures and investments in workforce development is likely the most effective path forward.

Keywords: tariffs, manufacturing jobs, US manufacturing, Wells Fargo, Trump, trade policy, labor costs, skills gap, economic analysis, factory jobs, domestic production, Nvidia, Apple, TSMC, Deloitte, Manufacturing Institute, unemployment, immigration, population growth, economic agenda, protectionism, workforce development

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