Tariffs Won’t Reindustrialize America. Here’s What Will
To revive manufacturing the US needs to borrow from China’s playbook.
American industry has certainly seen better days. Manufacturing output has never recovered to the peak recorded on the eve of the 2008 financial crisis, when the sector’s workforce was a million people stronger. The double whammy of Covid-19 and Russia’s invasion of Ukraine laid bare that US factories were unable to quickly scale up production of essential goods—whether masks or munitions. Storied manufacturers such as Boeing Co. and Intel Corp. and Detroit’s automakers are beset by constant crises, while China’s national champions (companies like BYD, CATL and Huawei) have been climbing from strength to strength.
For President Donald Trump, tariffs are a cure-all—to be levied on friends, foes and penguins alike. For almost all economists, though, tariffs are quack medicine that might deliver American manufacturers into even worse agony. Building a wall around the world’s largest economy is the wrong approach. Here we present a tariff-free menu of policies that offer a surer path to revitalizing US manufacturing.