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

• Wells Fargo said in a report that President Donald Trump's tariffs won't bring manufacturing back.
• High labor costs and a lack of workers would make building more factories an "uphill battle."
• US manufacturing needs $2.9 trillion in investment to reach 1979 employment levels.

President Donald Trump's push to revive American manufacturing through tariffs may face some hurdles.

Despite some high-profile commitments, including Nvidia's plans for a US-based supercomputer plant and Apple's pledge to invest $500 billion domestically, a new report from Wells Fargo economists predicts that bringing back offshored manufacturing jobs will be an "uphill battle."

"An aim of tariffs is to spur a durable rebound in US manufacturing employment," Wells Fargo analysts wrote in the report. "However, a meaningful increase in factory jobs does not appear likely in the foreseeable future, in our view."

The report attributes the potentially low factory job growth to high labor costs, a lack of suitable workers to fill vacant positions, and a subdued population growth from lower fertility rates and slower immigration.

"Higher prices and policy uncertainty may weigh on firms' ability and willingness to expand payrolls," the analysts added.

The tariffs are part of Trump's broader economic agenda to revive American manufacturing as a pathway toward middle-class prosperity. The tariffs are meant to hike the costs of imports to incentivize companies to make goods domestically.

"Jobs and factories will come roaring back into our country," Trump said while announcing tariffs on April 2. "And ultimately, more production at home will mean stronger competition and lower prices for consumers."

Some tariffs imposed on April 2 have been temporarily paused or greatly reduced, including tariffs on China. The 10% across-the-board tariff remains, as do some specific tariffs on Mexico and Canada, plus 30% in duties on China. Duties at their current level are still the highest they have been since the 1940s.

"In order for manufacturing employment to return to its historic peak, we estimate at a minimum $2.9 trillion in net new capital investment is required," Wells Fargo analysts wrote. "Assuming businesses are willing and able to invest such ample sums, questions over staffing remain."

The Wall Street bank says that US manufacturing employment currently stands at 12.8 million, down from its 1979 peak of 19.5 million. To get back to that mark, the US would need to add roughly 6.7 million jobs. Wells Fargo added that the figure is nearly the same as the entire pool of unemployed Americans, which in April was 7.2 million, according to the US Bureau of Labor Statistics.

"Population aging, negative perceptions, and skill mismatches also underpin workforce concerns," Wells Fargo analysts wrote. "New jobs will require different skills than those previously lost."

In 2024, Taiwanese chipmaker TSMC said it delayed the opening of its Arizona chip factory due to a shortage of skilled workers. A report released in April 2024 by 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.

"Tariffs must be high enough to make the cost of domestic production competitive in the US market, and they also must be kept in place long enough for producers to bring on additional workers and expand capacity," the report concluded. "If the economic or political costs are deemed too high, the current administration could quickly dial-back prevailing duties further."

The White House did not immediately respond to a request for comments.