Reindustrialization is just central planning, MAGA-style

October 17, 2025

Reindustrialization is just central planning, MAGA-style

Why is President Trump so intent on inflicting his unpopular tariffs on the U.S. economy? How did America, always a trading nation bordering two oceans, suddenly become the free world’s glowering bastion of protectionism?

The president’s logic is often fuzzy, but for once he and his economic team have a clear answer: They’re on a mission to reindustrialize America. They call it “economic nationalism,” but it’s really just central planning, MAGA-style.

Trump believes free trade agreements and globalization eviscerated U.S. manufacturing, studding the landscape with shuttered factories — “ tombstones ” as he put it in his bleak 2017 inaugural address.

In fact, U.S. manufacturing output has grown substantially since 1980. What has declined is factory employment and manufacturing’s share of GDP. That tracks the trend of deindustrialization and rising demand for services in all advanced countries, regardless of trade policies.

Nonetheless, the president is ripping up trade agreements and taxing imports from friends and foes alike, in hopes of generating lots more factory jobs. But building walls around our economy won’t change the fact that automation has severed the old relationship between increased industrial production and blue-collar job growth.

Trump’s factory nostalgia is diverting attention from our country’s true economic imperative: Winning the race with China to master AI, biotech, clean energy and other new technologies reinventing modern economies. That’s the key to raising living standards for all Americans — not just production workers.

In a July speech in Michigan, U.S. Trade Representative Jamieson Greer set three goals for Trump’s reindustrialization push : to decrease our trade deficit in goods, to increase real median income and to boost manufacturing’s share of U.S. GDP.

As my Progressive Policy Institute colleague Ed Gresser has shown, it is falling short . The share of GDP in manufacturing shrank in the first half of this year, and the U.S. trade deficit in goods rose. (Median income figures won’t be available until late 2026). The manufacturing sector has lost 38,000 jobs so far this year.