While there is broad bipartisan agreement about the need to restore U.S. competitiveness in manufacturing, especially in communities left behind in globalization, the debate about what to do is tearing us apart at the seams. But it doesn’t have to be that way. We have less than 90 days to turn away from tariff brinkmanship and hyper-partisan government toward a synthesis that deals with the legitimate grievances of a broad majority. 

The key, I believe, is to take the best ideas from the national arena and implement them from the bottom up — from the communities in need. The initiative would have to be anchored by meaningful government innovation and performance-based incentives, all with the goal of bringing development capacity to the forgotten Americans. Here are the key ingredients.

Targeted Place-Based Investment: It was a good idea, advanced by the Biden administration, to make substantial investments in industrial transformation. But building new industries and supply chains through investment incentives and (highly selective) trade protection takes time. One big problem with the multi-trillion dollar Biden investments was that most of the money was filtered through antiquated government programs with complicated eligibility requirements, so they often failed to reach the communities that needed the help the most.

The solution is to reform federal programs by more simply defining the eligible projects and places that local leaders can leverage to stimulate long-term development. By conservative estimates, $200 billion could generate $1.6 trillion in new economic activity over a decade. That’s bang for the buck.

Tariff and Trade Reform: Another good idea, this one advanced by the Trump administration, is to revisit tariff rules set up decades ago to first support allies with the goal of blocking communist expansion and then to integrate China into the world economy. Today, these rules put U.S. manufacturers, who have to comply with basic health and workplace safety requirements, at a disadvantage. Has President Trump oversold the importance of change here the same way that the Biden administration oversold the speed and scale of the Inflation Reduction Act? Unfortunately, yes.

But retooling the global supply chain that created the cheap consumer goods economy can’t happen overnight. So the immediate task is to stop the destruction of the metaphorical village in our effort to save it. We have a very narrow window in which to figure out how to ensure that smaller manufacturers most dependent on global supply chains and export markets aren’t collateral damage in Trump’s tariff war.

Tax Reform: If we do want to help restore communities hollowed out by globalization and technology, shouldn’t the tariff revenues we generate go to the places with the best opportunities for high social returns? Local communities and businesses are better able to decide what projects and markets are ripe to scale up in this moment. I’m confident that these investments will pay for themselves through economic development — and good jobs. That’s why tariff revenues should not pay for tax cuts for the rich, but rather be shared with state and local governments, local businesses and nonprofits.

Local Innovation: The best way forward is not to rely on Beltway brainiacs (and lobbyists) to write another 2,500-page law like the IRA. We could empower local leaders with flexible funding and a one-page performance agreement to use earmarked tariff revenues to catalyze regional economic resilience and manufacturing projects. The good news is that we don’t need to start from scratch. There are a host of federal predevelopment and economic development programs including Community Disaster Resilience Zones and Opportunity Zones that could be blended and braided around a consensus set of eligible projects, places and performance conditions. This funding could then catalyze private investment in local public-private partnerships using deal-matching platforms like the Milken Institute’s Community Infrastructure Center.

Americans have grown wary of promises from Washington. They want to see innovative deployment that maximizes local strengths and catalyzes public-private impact partnerships in regions across the country. Can the administration, Congress and DC think tanks read the writing on the wall?

We do know pretty much everyone agrees that the eras of free trade and worship of neo-liberalism to allocate investment are over. A big question now is whether a new consensus on smart federalism and local control can emerge to help forgotten Americans. A bipartisan effort to earmark the eventual tariff revenues to the exact investments in local economies through infrastructure initiatives and federal-state-county partnerships for training, workforce development and sustainable growth is within reach. Let’s not blow it.