In a speech on Wednesday afternoon, President Donald Trump announced tariffs of at least 10% for all countries that trade with the U.S. except Canada and Mexico, and singled out certain nations and blocs for much higher levies, including 34% for China, and 20% for the European Union. 

The announcement was the culmination of weeks of speculation about what specifically the president would do about an economic policy he’s touted for years. He previously enacted tariffs during his first administration, targeting China and certain goods like steel. And earlier this year, he announced tariffs on China, Canada, and Mexico, as well as a 25% levy on auto imports. But Wednesday’s reveal was a major escalation in a trade war that he says will spur growth in the U.S., adding that “jobs and factories will come roaring back into our country, and you see it happening already.” 

Economists, however, beg to differ. Manufacturing jobs have been on the decline for decades. It costs a lot more to hire workers in the U.S. than it does in many foreign countries, where wages are just a fraction of what Americans earn, and the relatively high U.S. dollar doesn’t help, either. “This is not going to succeed at reviving U.S. manufacturing,” Michael Strain, director of economic policy studies at the American Enterprise Institute, a conservative think tank, previously told USA Today. 

And a research paper published last year that examined the labor implications of Trump tariffs from his first term found that they didn’t bring back jobs in protected sectors. Retaliatory tariffs from other countries, however, did create U.S. job losses. 

Manufacturing trade groups aren’t thrilled with the latest turn of events. Jay Timmons, the president of the National Association of Manufacturers wrote in a statement on Wednesday: “The high costs of new tariffs threaten investment, jobs, supply chains, and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.”

Some companies have agreed to play ball with Trump’s tariff strategy—Apple, for instance, has promised to build AI servers in the U.S.; Honda says it will build a factory in Indiana; and Hyundai says it will build a steel plant in Louisiana. But even if those companies do follow through, it would take a long time, and be just a drop in the bucket for the labor market. 

What tariffs are all but guaranteed to do, however, is raise prices. Rather than absorbing costs themselves, companies will pass them onto consumers, who have already been dealing for years with high inflation. That’s led to fears among economists that people will pull back spending, which would in turn hurt companies’ ability to hire.  

“There are certainly beneficiaries of protection,” Erica York, an economist at the Tax Foundation, a think tank, tells Fortune. “But they pale in comparison to others paying higher costs.”

Azure Gilman
azure.gilman@fortune.com

Irina Ivanova
irina.ivanova@fortune.com

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