According to an analysis by Wells Fargo, President Donald Trump’s tariffs are designed to provide incentives to bring manufacturing jobs back to the US, but the goals are not as feasible as they appear. Bringing factory work back to the US meant a significant increase in labor costs, and many businesses simply couldn’t afford it, Wall Street bank said. Even if they are willing to absorb or pass higher prices to consumers, businesses are already being challenged by the tougher labor market for production workers. “A meaningful increase in factory work is not seen in the foreseeable future in the near future, in our view,” Sarah House, senior economist at Wells Fargo, said in a research report. “Higher prices and policy uncertainty can strain businesses’ ability and willingness to expand wages.” The Trump administration believes the rebroadcast boom is on the horizon in the wake of a trade war that raises the effective tariff rates facing importers since the 1940s, accounting for the suspension of recent heavy duty. Trump has also pledged tax cuts to businesses that will revive manufacturing in the United States. This included several well-known announcements from the tech sector, including Nvidia’s plans for a US supercomputer factory and Apple’s commitment to invest $500 billion in its home. According to Wells Fargo, “a battle on the uphill” still seems like a fool’s errand to bring manufacturing employment back to its heyday. Currently, the country has 12.8 million manufacturing jobs, 6.7 million fewer than its peak in 1979. To return the sector to its golden age, employment needs to increase its employment of around 22 million people. But there are only 7.2 million unemployed people in the United States, Wells Fargo said. “Bringing US manufacturing employment back to a level similar to remote at its historic peak will be a challenging battle,” Wells Fargo said.
