Growing up in Ohio and Pittsburgh, I witnessed the collapse of once-strong middle-class communities into what is now known as the Rust Belt. The steel mills and factories that were once the lifeblood of our cities gradually closed.
This decline, accelerated by the pursuit of one-sided free trade, crippled the manufacturing industry that has traditionally been the backbone of the American middle class. As we turned away from our manufacturing roots, we began to feel the consequences: a shrinking middle class and weakened national security.
According to the 2015 census, the middle class no longer represents the majority of Americans – a historic and troubling change. It’s not hard to draw a connection between the decimation of the manufacturing industry and this decline. Manufacturing has historically been a traditional path to the middle class, offering well-paying jobs that didn’t necessarily require a college degree. This loss is more than just economic; it’s a social and cultural decay.
I am not here to lament the past, but to advocate for a better future.
In my book, Manufacture Local, I lay out a comprehensive plan to revitalize American manufacturing, detailing the positive policy steps leaders should take to revitalize American industry.
Power of manufacturing
The Department of Defense has stated, “Every dollar invested in manufacturing adds $2.79 to the economy, the highest multiplier effect of any sector.” Manufacturing is the primary driver of innovation in the United States, accounting for 55% of all patents and 70% of all research and development spending. Each manufacturing job creates seven to 12 new jobs in related industries.
Manufacturing creates jobs. Whether directly or indirectly, most jobs depend on it. A nation must always remember that services depend on manufactured goods and world trade is based on goods and not services. About 80% of world trade is trade in goods and only 20% is trade in services.
Look at the service sectors of our economy. There is retail and wholesale trade, the real estate sector, and even healthcare. All of these industries depend on the movement and sale of manufactured goods. Even in the financial sector, activities depend on manufacturing. If you stop manufacturing, you eventually stop all the other sectors that depend on it. Software cannot be deployed without physical hardware. A real estate agent cannot sell a house until it is built. A nurse cannot treat someone without medication. A barista cannot make your latte without an espresso machine.
Those who claim that America is now a service economy and “post-industrial” fail to understand that “post-industrial” actually means “pre-industrial” – a nation that cannot produce its own goods, and that nation is weak and dependent on other nations.
National Security
Beyond economic arguments, there are also compelling reasons for reviving American manufacturing that concern national security. America cannot have true national security if it is unable to produce the goods it needs, even in wartime. In wartime, supply chains are the first target. Local industrial capacity is the best defense against future wars.
A recent report on national security interests by retired Brigadier General John Adams concludes that U.S. national security and the health of the country’s defense industry are at risk due to over-reliance on foreign suppliers to procure key defense items. “America’s vulnerability today is frightening,” Adams wrote.
Solutions for the conversion
The most effective solution to rebuild American industry is tariffs. Tariffs is NOT a dirty word.
Tariffs are the best tool to put mass production back into the hands of American manufacturers so they can justify investments in automation and robotics.
Americans must ignore the cries of “protectionism” and “isolationism” and the lies that tariffs are a tax on Americans. Americans can buy American-made goods to avoid tariffs on foreign products. This will create a circular economy with the expansion of manufacturing employment and the increased purchasing power that the higher-paying jobs provide. Nearly two-thirds of America’s GDP is consumer spending, but our current industrial policy does not serve or benefit the purchasing power of our own people.
Considering that the FBI has called China’s theft of American information one of the largest wealth transfers in the history of civilization, enforcing trade law is a priority to protect America.
Public pension funds in the United States have invested more than $68 billion in private Chinese companies over the past three years. Wall Street must be guided and motivated to invest in American industry.
About 75% of the manufacturing industry is made up of small businesses with 20 or fewer employees that need to order parts in larger quantities to justify investments in new equipment or employees. Large orders lower the cost of American-made goods through economies of scale and accelerate the adoption of automation and robotics in industry, resulting in cheaper, “Made in America” products.
A vision for the future
As manufacturing returns to the country and tariffs bring jobs back in large numbers, American goods will remain more expensive than goods produced abroad, especially in India and China, where exploitation is rampant and environmentally harmful materials are readily available. A recent poll found that 70% of Americans prefer to buy American-made goods and that about 83% would pay up to 20% more for domestically produced products.
Let’s reward Americans for buying goods made in the USA, which strengthens our industrial base. And let’s use tariff funds or cancelled foreign aid to provide tax credits on “Made in USA” items.
With an average global tariff of 15 percent, the U.S. Treasury could replace the $461 billion paid by the bottom 90 percent of income taxpayers.
In addition, investing in local mining and refining operations will ensure that manufacturers have the raw materials they need, reducing dependence on foreign supplies. Using diverse energy sources will also reduce production costs and strengthen our economic resilience.
Revitalizing American manufacturing is not just about economic growth; it is also about ensuring national security and restoring the middle class.
Alexander Hamilton once aptly observed, “No nation is stronger than that which is self-sufficient.” By implementing a grand manufacturing vision that puts America first, we can rebuild our industrial base, strengthen our economy, and secure our nation’s future.
As we look to the future, there is hope. By taking actions that support local manufacturing, we can rebuild not only an industry but a way of life that provides economic stability and national security. The path forward is challenging but necessary. Together, we can make the Rust Belt the backbone of America again.
John Gardner, an Ohio-raised entrepreneur, is the author of Manufacture Local.
