We're Collecting Billions in Tariffs. Let's Invest them in Rebuilding the US Industrial Base.

Last month in Detroit, something extraordinary happened. Over 1,000 founders, investors, and government officials gathered for Reindustrialize 2025—and when Palmer Luckey asked the crowd if they'd pay 20% more for an American-made computer, the roar of approval wasn't about specs. It was about identity. About pride. About bringing manufacturing home.

Yet here's the disconnect: Despite this cultural momentum, despite the Trump administration putting their stamp on domestic industrial policy—tariffs, tax incentives via the Big Beautiful Bill, regulatory rollback, federal lending from Commerce, DOE, and DOD—the data tells a sobering story. Construction starts for new manufacturing facilities have plateaued and begun declining from their 2024 peak. The industry is in a wait-and-see period.

We're building a wall around our garden with tariffs, but we're forgetting something crucial: the garden itself still needs water to grow. Protection without cultivation won't bring back American manufacturing. We need a completely new strategy—one that takes the billions in tariff revenue and reinvests it directly into scaling the next generation of American industry.

The Momentum and The Stall

Over the past five years, the US has experienced a resurgence of domestic manufacturing driven by major tailwinds. Since the end of COVID, manufacturing construction starts have grown from $80B annually in August 2021 to nearly tripling at their peak—an astounding step up in just four years.

While some may try to attribute this to the IRA and CHIPS Act, the tailwinds run much deeper than federal stimulation. During COVID, our globally centralized supply chains completely broke down, creating massive disruptions from automotive to aerospace. The disruptions catalyzed a much deeper movement in the American people: we've made this stuff before, why don't we make it now?

But momentum isn't enough. Despite all these efforts, we're seeing construction starts stall. More is needed, and reinvesting import tariffs would catapult domestic reindustrialization to new heights.

The Generational Alignment

The need for industrial resilience is generationally aligning from GenZ to Baby Boomers. For decades, the US middle class has been shrinking with fewer and fewer families being able to raise their children with the opportunities they themselves enjoyed. The baby boomers watch hopelessly as their children and grandchildren struggle to achieve what was once taken for granted—as main street America withers up and dies. Gone are the simple days when we raised our families on a single income, worked making things we were proud of, and saved for retirement.

On the other side, there is a new generation of engineers, digitally native, itching to invent the new industrial foundation. Tackling the challenge with real solutions to reindustrialize the US with technologies cheaper, cleaner and most important, worker friendly. This isn't just about economics—it's about restoring an American Dream where making things provides dignity, stability, and the ability to build a life you're proud of.

The fact is, everyone sees it now. The disruptions didn't just break our supply chains; they broke the illusion that outsourcing everything was sustainable. We're ready to rebuild, but readiness isn't enough without the right financial tools.

The Valley of Death Problem

I've seen this challenge firsthand. At Tesla, we transformed a 5.2 million square foot former Toyota facility into the production machine for the Model S. We had the technology, the team, and the vision—but we had to get creative with financing. We bought a seven-story Schuler hydraulic stamping press from a distressed Detroit supplier for $6M instead of $50M new. We used Automated Guided Vehicles to work around equipment we couldn't afford to replace yet. "Scrappy, not crappy" became our motto.

But the future of American industry shouldn't rely on being scrappy. Too many innovators today are stuck in what we call the "valley of death"—the gap between proven product and industrial scale. They're contorting their operations, taking on predatory debt, or inflating their equity valuations just to build the facilities they need. They're crossing a treacherous rope bridge of financing when we should be building them a stone arch.

The existing patchwork of solutions—a government loan here, some project equity there—won't support the generational transformation we need. We need what I call a "keystone": a new financial tool that unlocks capital for industrialization at scale.

The $300+ Billion Opportunity

Here's what we're missing: US tariffs brought in $29B in June 2025 alone and $152B since the beginning of the year. That's real money sitting there while our manufacturers struggle to scale.

Tariffs are akin to building a wall around your garden, but the garden—the US manufacturing base—still needs incentives to rebound at the speed for reindustrialization to take hold. Historically, incentives have included tax credits, low-cost debt for capital equipment, purchase guarantees. But we have an unprecedented opportunity: create a dedicated reinvestment mechanism that channels tariff revenue directly into manufacturing scale-up.

Imagine standardized milestone-based equity (like biotech uses), inventory credit systems (like apparel), or power-purchase-agreement-style contracts for manufactured goods. Target strategic industries—semiconductors, batteries, biotech, critical minerals—but make the tools broadly available. This isn't about picking winners; it's about giving every promising American manufacturer the chance to cross the valley of death.

Why This Works Now

The timing couldn't be better. At Reindustrialize last week, mainstream media covered a manufacturing conference like it was Coachella. The New York Times and The Free Press sent reporters—not to cover trade policy, but to document a cultural movement. When manufacturing becomes culturally cool, you know something has shifted.

The talent is ready—that new generation of digitally native engineers wants to build. The capital exists—investors managing over $1 trillion showed up in Detroit. But most importantly, the middle class needs this. Reindustrialization isn't just about GDP or national security; it's about rebuilding the economic foundation that allowed single-income families to thrive, that gave people pride in what they made, that built strong communities around strong factories.

This creates a virtuous cycle: tariff revenue becomes manufacturing investment, which creates good jobs, which rebuilds communities, which renews belief in American manufacturing, which attracts more talent and capital. We can turn a defensive trade policy into an offensive industrial strategy.

Call to Action

The current administration has the opportunity to make a generational shift in bringing manufacturing back to the US, rebuilding the middle class and the backbone of the US economy, securing our national independence and cementing the US as a technology leader.

Congress should pass legislation dedicating tariff revenues to manufacturing finance programs. The Departments of Commerce, Defense and Energy should design milestone-based funding mechanisms that match the realities of scaling hard tech. Industry leaders need to come together—as they did in Detroit—to create the standardized financial instruments that will define the next era of American manufacturing.

We can't let this moment slip away. The data shows construction starts declining. The industry is waiting. Let's give them something to build for.

Conclusion

Twenty years ago, I walked into that empty Tesla factory and saw possibility in 5.2 million square feet of abandoned potential. Today, I see that same potential in American manufacturing—but multiplied across thousands of facilities, millions of workers, and entire communities waiting to be rebuilt.

We're at a crossroads. We can continue building walls with tariffs while our industrial garden withers from lack of investment. Or we can be bold: take those tariff billions and pour them back into the technologies, factories, and workers who will define America's next century.

The wall is up. The garden is ready. Now it's time to water it.

This is our chance to restore not just factories, but the communities and families that thrived when America made things. To rebuild the backbone of the American economy and, with it, the American Dream. The moment for reindustrialization is here—but moments don't last forever. Let's not waste this one.