President Donald Trump’s reliance on tariffs to boost US manufacturing is being challenged by economists, who say the strategy is unlikely to achieve its intended effect. A recent report from Wells Fargo warns that increasing domestic workforce expansion will be an “uphill battle” due to tariffs’ impact on companies.
Manufacturing employment in the US remains at 12.8 million, down from a 1979 peak of 20 million, according to Wells Fargo. The tariffs are intended to revive American manufacturing but instead create a short-term environment that makes it harder for companies to expand payroll and production efforts.
The report’s author, Sarah House, states that increasing factory jobs is not likely in the foreseeable future. Companies like Amazon and Walmart have warned that tariffs will force them to absorb costs or pass them down to customers, which is not conducive to growing their workforce.
While some major US companies, including Apple and Johnson & Johnson, are investing in American production expansion, a significant increase in manufacturing employment is still years away. The National Association of Manufacturers predicts 3.8 million new manufacturing jobs by 2033, with about half of those positions going unfilled due to an aging work demographic and tight immigration policies.
The report highlights the need for trillions of dollars in steady investment over several years to achieve a manufacturing rebound. Labor costs in the US are high compared to the rest of the world, and executives like Pandora CEO Alexander Lacik have refused to move production to the US due to a lack of affordable and skilled labor.
In theory, tariffs should encourage domestic consumption, but their effects need to be sustained over time. Wells Fargo predicts a minimum of $2.9 trillion would be needed to expand US manufacturing employment to its 1979 peak. With Gen Z showing little interest in factory work, the report concludes that returning US manufacturing employment to its historical peak will be an uphill battle.
Source: https://fortune.com/2025/05/23/wells-fargo-trump-tariffs-american-manufacturing-employment