The Liberal Case for "Made in the USA"

After considerable activity during the Biden era, the substance and direction of American industrial policy are in doubt. The Trump administration has engaged in some highly unorthodox, even quasi-statist moves, such as its “golden share” in US-Nippon Steel and the Pentagon’s new majority stake in MP Materials, the country’s sole rare-earth company. But Donald Trump’s lofty promise to revive domestic manufacturing continues to ride on tariff rates not seen in almost a century. From major industrial inputs such as steel, aluminum, and copper to finished goods such as home appliances and autos, Trump is targeting the sectors that were the bedrock of America’s postwar boom but have seen their share of GDP and national employment drop steadily in the last fifty years.

In response, Democrats have mainly echoed mainstream economists, deriding the tariff strategy as one that is sure to bring about stagflation, needlessly high prices for basic goods that aren’t imperative to re-shore, and long-term technological decline. New inflation data suggests Trump’s tariffs are indeed beginning to take a toll, while consumer sentiment—though up slightly this month—still reflects anxiety about potential price hikes and fatigue over routine expenses.

As the affordability crisis shows no signs of abating, it seems obvious to attack what might finally prove to be Trump’s Achilles’ heel. Yet it would be a mistake for Democrats to cede the shape of industrial policy to Trump, which a reflexive anti-tariff position may well precipitate. Concrete steps must be taken (or at least drafted for a future Democratic administration) to blunt the effects of the second China shock beginning to unfold. Moreover, it would be erroneous to reduce manufacturing to a narrow interest that is of no greater significance to the country’s continued development than any other sector. No substitute has truly been established in any advanced economy for the productivity and demand that historically sprang from diversified, remunerative manufacturing. Even when accounting for labor-saving technology and other trends that have changed the process and labor composition of mass production, a diversified industrial base remains critical to preventing economic concentration, domestically and internationally.

Domestic manufacturing, more than a national security concern, is also integral to pre-distribution and improving life chances. Progressives drawn to the producer-populism of Sherrod Brown and his predecessors must not forget this. While advances in technology and social change sometimes cause difficult transitions in the labor market, not every plant closure and wave of dispossession is inevitable. Blight, lost know-how, anomie, and weak social trust: these and other aspects of industrial decline are conditions that left-developmentalists have historically fought to prevent and cannot, in an age of geopolitics and relentless monopoly power, leave to Republicans to solve.

With China’s dominance, stagflation, and disruptions from AI—still widely feared as an unprecedented force of mass job displacement—on the horizon, a new social contract centered on “Made in the USA” may seem quaint. But without it, progressives will be at pains to offer a way forward for Americans hungry to be masters of their own destiny.

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Of course, since Trump appears to have a lock on a majority of working-class whites, particularly men, Democrats might reasonably conclude revamping their own “Made in the USA” agenda just isn’t worth the commitment. Within progressive circles, meshing climate activism and economic patriotism proved a heavy lift, and Joe Biden’s policies only marginally improved Kamala Harris’s support in key swing counties. Progressives disenchanted with industrial policy and frustrated by the tepid public response to Biden’s version of it may wager it is unimportant to growing their coalition.

But this is a myopic approach to an issue that has ramifications for how progressives conceive of the relationship between economic opportunity and social justice. For one thing, manufacturing and its complementary sectors have historically boosted the upward mobility of blacks, Latinos, and women without a college degree. By the same token, industrial decline has in many cases stunted this progress. Deindustrialization was especially punishing for what were once strong middle-class black communities in cities such as Baltimore, St. Louis, Cleveland, Milwaukee, and Gary, Indiana. Working-class Latinos were also buffeted by plant closures in sectors with good wages, which relegated many to menial service work. Countless former textile and furniture hubs across the South similarly saw their prospects for local improvement and intergenerational prosperity fade. Only a handful of American cities have fully transformed into education and service hubs, and even then, advanced production plays an important, though less visible, role in metropolitan GDP.

On the academic left it is common to lament these outcomes but warn against nostalgia for factory life. After all, the thinking goes, it entailed drudgery, monotony, and social conformity—American workers of yore could not have possibly derived much satisfaction from the work they did, much less cultivated a sense of personhood. Yet the profound discontent of our times suggests the “postindustrial” transition has failed most Americans. Meanwhile, the green shoots of a manufacturing revival offer a window into a different future. When companies do take a chance on neglected demographics, the old cycles of local development and community-building come to life.

These investments don’t always have to take the form of explicit public-private partnerships or be prodded through tariffs and executive-branch jawboning. To be sure, headline-grabbing announcements by established firms like TSMC, Johnson & Johnson, Hyundai, Panasonic Energy, and Chobani tend to drive perceptions of whether there really is a reinvestment trend afoot. But the decisions of small manufacturers and other small businesses are, in the aggregate, of equal importance to underprivileged Americans. From 2013 to 2023, small businesses were responsible for 55 percent of total job creation, according to the Bureau of Labor Statistics; smaller firms provide over a third of the country’s roughly 12.7 million manufacturing jobs. And the impact of new plants, even those just creating a couple hundred long-term positions, can be significant. Newer ventures in textiles, pioneered by firms like American Giant, and other once-languishing “legacy” industries have helped turn around blighted counties. More recently, skill-building manufacturing jobs have supported “second chance hiring” for formerly incarcerated people and those recovering from addiction and street life.

That perseverance against the odds may not always show up in BLS reports, but it is critical to replenishing America’s strength in the industrial arts. Though sometimes tenuous, real patterns of renewal and opportunity are a reminder that progressives can’t abandon “place-based economics.” They should want to influence it and improve it—not from afar in D.C. but in the actual districts where critical investment decisions are being made.

Progressive industrial policy, however, isn’t just a tool to deal with regional inequalities, win back disaffected workers, and mitigate social ills like recidivism, important though those goals are. The future of manufacturing is also directly relevant to the health and dynamism of coastal cities that have become overly reliant on real estate, finance, tourism, and hospitality services. Urban residents who recognize the potential of rezoning to foster all sorts of workshops grasp this. Despite the impact of Covid and various failures of urban governance, sections of Brooklyn, Baltimore, Seattle, Portland, and the Twin Cities have offered hints of a possible renaissance in artisanship and batch production, fueled by a new generation of creative “makers” who understand production is about more than grey industrial zones remote from other markers of civilization.

The extent of this activity shows it is more than the archetypal “white male” tradesperson who is interested in reclaiming the material-technical know-how of past generations. According to the Economic Innovation Group, the ongoing surge in urban manufacturing accounted for 61 percent of total domestic manufacturing jobs created from 2019 to 2023. And much like newer manufacturers in left-behind regions rocked by trade shocks and captive to giant multinationals, small urban producers want to facilitate more opportunities for people disillusioned by the actually existing knowledge economy. Their growth suggests there are—or should be—policy levers beyond massive subsidies, trade controls, and other macroeconomic interventions to support innovation and domestic capacity. Policymakers, accordingly, should be attentive to the ability of these entrepreneurs to weather the unintended downstream effects of radically upending global trade. As founders running small enterprises dependent, in some cases, on difficult-to-source inputs, they are understandably concerned by Trump’s sweeping tariffs and the impact that trade wars will have on their ability to grow.

In a volatile trade environment, the fortunes of smaller manufacturers could significantly impact national politics. In fact, urban makers, their small-town counterparts, and new leaders in advanced manufacturing could form the linchpin of the kind of developmental coalition that presently eludes both parties. Their collective aims are firmly in line with expediting the leaps in productivity politicians left and right profess to support. They are determined to regenerate mixed-use neighborhoods and make custom and batch production central to the vitality and character of their locales. Their philosophy and business models naturally dovetail with strengthening regional supply chains and bolstering vocational training. These commitments epitomize economic patriotism as much as any other to build new facilities, train the forgotten, and rehabilitate derelict places.

The emerging “producerist” trend, however, also reflects a healthy indifference to the logic that has driven the economy’s growing bifurcation between the well-paid credentialed class and everyone else. By definition, today’s small producers are not deterred by rote textbook arguments about sheer economic efficiency. They do not see macro-historical development as strictly linear, marked by mass de-skilling, the obsolescence of craftsmanship, and outsourcing to overseas jurisdictions. They intuit, rather, the dynamism that clustered artisanship can still generate in the real world.

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In an era where every major policy debate is conditioned by Trump’s (increasingly unhinged) pronouncements, it is easy to get swept up in arguments for or against a particular national industrial strategy. Political polarization has, perhaps inevitably, fueled deeply partisan responses to specific policies, despite a few intriguing signs (the CHIPS and Science Act, the Bipartisan Infrastructure Law) of cross-party collaboration early in Biden’s presidency. Yet the direction of industrial policy concerns more than whether or not to subsidize production and consumption of EVs or to ramp up tariffs and export restrictions on China. It has to be more directly tied to improving Americans’ living standards and expanding their opportunities and thus more aggressively targeted at local obstacles to investment. A strong industrial vision, furthermore, requires clear goals and persuasive means; to succeed politically, it cannot be borne of economic fantasy and geopolitical panic.

In this respect, debates about industrial policy need to be grounded in what is both possible and strategically necessary. Continuing to de-risk our economic relationship with China, expanding our energy independence, and responsibly mitigating climate change should all be paramount. But although a stronger industrial base will be vital to the country’s future, its contribution to employment will probably never rebound to the level seen in the late 1970s. A surge in hi-tech, custom, and batch manufacturing, assisted by leaps in fields like 3-D printing and AI, might offset some of the white-collar losses the latter is expected to fuel and provide an outlet for creative types otherwise consigned to unstable service jobs. But even with ample government incentives, it would be difficult for new and recovered industries to provide jobs that matched the heyday of General Motors or General Electric.

Yet that doesn’t mean progressives shouldn’t think more imaginatively and holistically about the benefits of directing more capital and labor to enterprises focused on material goods and old-fashioned know-how. Not every improvement to the country’s fabric, including Americans’ sense of economic well-being and achievement, can be captured by GDP. Any endeavor that strengthens the self-direction of inner-city kids, encourages family formation, or boosts the labor participation rate of prime-age men contributes in some way to the country’s development. And while physical production need not be overly valorized, it seems impossible to enshrine the dignity of work without it. People from all walks of life are creative and restless and seek ways to make interesting things even if their own work lives don’t allow them to; it is up to policymakers and political leaders, then, to foster livelihoods for disadvantaged Americans that engender greater feelings of fulfillment and self-respect.

That may sound like a back-to-basics approach. It is not predicated, however, on hoary notions of a “lost” work ethic, but on reimagining the path to inclusive development. If the country is to truly build resilience, pro-worker forces across the government must lead the charge for new investments in manufacturing that yield family-supporting incomes and secure the foundations of American prosperity for future generations.