A quick note before we dive in. This week, “I Believe” officially hit the numbers to rank as a Top 10% global podcast for all of 2025. Of course, it’s still February, and we have plenty of room to grow. I just want to take a moment to say thanks for listening!
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How do we bring manufacturing back to America?
🎙️ Tariffs Built American Industry
In the early 1800s, the United States was still an economic underdog. We had won our independence from Britain, but economically we were far from independent.
Across the Atlantic, the Industrial Revolution was transforming British manufacturing. British factories had decades of experience in mass production. They churned out cheap, high-quality goods. Meanwhile, US manufacturing was small, scattered, and struggling to compete.
America’s economy revolved around agriculture. Cotton. Tobacco. Wheat. We relied heavily on European imports for manufactured goods. British industries dominated global trade, producing textiles and iron at such low costs that American businesses couldn’t compete.
That left us with a major vulnerability: We were too dependent on foreign goods. Without a strong domestic manufacturing base, America had little economic control over its own future.
James Madison & The Road to War
In 1808, America elected James Madison as the fourth President of the United States. Tensions with Britain were boiling over.
For years, British naval forces harassed American ships, seized cargo, and forced American sailors into their navy, a practice known as impressment. As an international insult, the British stirred unrest in the Northwest Territory, backing Native American resistance against US expansion.
By 1812, America had had enough. On June 18, 1812, Congress declared war on Great Britain.
The War of 1812: A Mixed Outcome
Militarily, the War of 1812 was a mess. The US attempted to invade Canada, which … didn’t go well. We did capture York, which is modern-day Toronto, and burned public buildings, but the British retaliated in full force. They marched into Washington, D.C. and burned the White House and the Capitol.
But here’s where things get interesting economically.
British naval blockades cut off trade. Those cheap British imports we had relied on were gone.
American businesses had no choice but to step up. Factories that might have otherwise struggled suddenly had a captive market. We had to produce goods for ourselves, and for the first time, we saw what an independent American industry could look like.
The Aftermath & Economic Crisis
In December 1814, the war ended with the Treaty of Ghent. Neither side gained or lost territory. Militarily, it was a stalemate.
Symbolically, it was a turning point. The US had stood up to Britain and survived. National pride soared. The war cemented America’s identity as a sovereign power.
While the fighting stopped, Britain wasn’t done economically. Almost immediately, British manufacturers flooded American ports with cheap goods, undercutting US businesses and threatening to wipe out our industrial progress overnight.
Congress had newfound confidence and a choice. We could let American industry collapse, or step in to protect it.
The Tariff of 1816: America’s First Protective Tariff
In 1816, Congress gained consensus and passed the first major protective tariff in US history. Even the Senate’s most prominent conservative states’ rights advocate, John C. Calhoun (South Carolina), publically advocated for it.
The Tariff of 1816 imposed a 20 to 30% tax on imported goods, particularly textiles, iron, and leather products. Our goal was to make British goods more expensive and give American manufacturers a chance to compete.
And it worked.
Textile mills in New England flourished. Lowell, Massachusetts, became a booming industrial hub.
Iron production surged in Pennsylvania, fueling railroads, construction, and manufacturing.
Infrastructure projects expanded as a growing economy demanded better roads and canals.
This was America’s manufacturing turning point. It was the moment we moved from a country dependent on foreign goods to one that could build its own industrial future.
The Tariff Debate: North vs. South
Now, not everyone was on board.
Southern cotton planters feared retaliation. They worried that if Britain had to pay more for American goods, they’d buy less American cotton in return. Higher tariffs, to them, meant less trade and lower profits.
This tariff debate, whether to protect US industries or keep trade open and cheap, would continue for decades. It fueled sectional tensions between the industrial North and the agrarian South.
Despite the controversy, the US took its first major step toward economic independence.
Instead of relying on Europe, we were finally building an economy of our own.
It’s easy to come to the simple conclusion that tariffs protected American industry. You could say, “Our success all started with tariffs!” But that would be a shortsided conclusion.
The decisive element that protected and grew American industry was consensus.
Tariffs Today
The Wall Street Journal last week reported President Trump is considering tariffs “in the neighborhood of 25%” on automobiles, semiconductors, and pharmaceutical products. He suggested these tariffs could increase over time.
There’s been a lot of discussion lately about tariffs, so that wasn’t so compelling.
President Trump suggested that US companies could be given a phase-in period on the items they import. This period could give businesses time to move production back to the US. He even said he’d allow “a little bit of a chance” for companies to re-shore before ramping up the tariffs.
He didn’t offer details, but the logic behind giving industry time to come home before tightening the screws is what makes this policy intriguing.
He billed it as a different kind of protectionism.
In the early 1800s, Congress passed protectionist tariffs to protect American manufacturing from British manufacturing. But American manufacturing was already here. It just needed a kickstart.
Today, we face a different challenge. We don’t need to protect industry. We need to rebuild it.
Starting in the 1960s and 1970s, America began exporting its manufacturing jobs overseas. Jack Welch and General Electric were at the forefront, pushing for offshoring to boost profits. Other companies followed, chasing cheaper labor and higher margins. Bit by bit, America willingly chose to dismantle our own industrial base. Washington stood by and watched as we destroyed our national capability for a quick buck.
As an example, that was our moment to save American steel. Had we implemented protective tariffs in the 1960s and 1970s, some of those jobs and, more importantly, that capability might have stayed here.
So … the protectionist tariffs President Trump is considering might not just be about protecting our industry from foreign competition.
They might be about protecting us from ourselves.
And the logic behind that is fascinating.
But again, let’s remember that the decisive element that protects and grows American industry is not tariffs. It’s consensus. There’s a key difference between the Tariff of 1816 and today.
James Madison and the Tariff of 1816: The Evolution of a Founding Father
James Madison wasn’t just a president. He was the architect of America.
Few figures in American history shaped the nation as profoundly as he did. Before he ever set foot in the White House, he had already built the American framework.
He was the Father of the Constitution. He meticulously crafted the structure of the US government. When the new republic teetered on the edge of collapse under the weak Articles of Confederation, it was Madison who designed a stronger system that balanced power between the federal government and the states. He sought stability without tyranny.
He didn’t just write the Constitution. He defended it. Alongside Alexander Hamilton and John Jay, Madison co-wrote The Federalist Papers, a series of essays that convinced the states to ratify the Constitution. Without him, there might not have been a Constitution at all.
When critics of the Constitution demanded protections for individual liberties, Madison delivered. He authored the Bill of Rights, enshrining free speech, religious freedom, and due process into law.
He designed the system. He fought for its ratification. And then, he spent the rest of his career making it work.
From Congressman to Secretary of State
Madison served as a congressman from Virginia, playing a crucial role in shaping early American policy. He was one of Thomas Jefferson’s closest allies, standing at the center of nearly every major political battle of the era.
He opposed Alexander Hamilton’s vision of a strong central government and a national bank, fearing that these would concentrate too much power in the hands of the federal government. He fought for states’ rights.
He fought against policies that favored wealthy elites over working-class citizens.
In 1801, he became Secretary of State under Jefferson. There, Madison oversaw The Louisiana Purchase, one of the most important events in US history. Jefferson saw an opportunity to double the size of the country. Madison handled the negotiations. He drafted the plan and authorized James Monroe to offer a price starting at ten million dollars for the land. In total, four cents per acre. The deal secured vast new lands, opened up the frontier for westward expansion, and strengthened the nation’s position on the world stage.
For eight years, Madison handled foreign affairs. He navigated tensions with Britain and France as the US struggled to maintain neutrality during the Napoleonic Wars. By the time he took office as president in 1809, conflict with Britain had become unavoidable.
Quite a list of accomplishments. The nation forever owes a debt to James Madison.
Because he literally wrote the document to govern America, he knew he needed consensus to make America great.
Madison and Tariffs
James Madison was a champion of divided power, states’ rights, and the right of the people over tyranny.
He wrote the document that explicitly gave Congress, not the President, the authority to impose tariffs. The Constitution, in Article I, Section 8, Clause 1, placed that power in the hands of the legislature.
And because he wrote it, Madison knew he could not simply order a tariff into existence. He needed national consensus to prompt Congress to act. A president acting alone creates no legacy, and certainly not a legacy like Madison’s. A policy dictated by one man is erased by the next administration. A policy built through Congress, through debate, and through broad support is the decisive effect that endures.
By 1815, Madison publicly acknowledged that the United States needed a strong manufacturing base to avoid dependence on Britain. In his Seventh Annual Message to Congress, he explicitly called for tariffs to protect American industry, marking a major shift in his thinking.
Madison understood the stakes. America had the natural resources, the labor force, and the potential to be an industrial power, but manufacturing would not develop on its own. He argued that certain industries, particularly those tied to national defense and essential goods, were too important to be left at the mercy of foreign competition.
He knew that without government support, industry could take decades to grow. Without broad, lasting consensus, it would not grow at all. A policy that shifts every four years did not support American industry.
Madison’s public support signaled a major shift in Republican thinking. His endorsement reassured moderates, convincing those who had once resisted federal economic intervention.
If the Father of the Constitution, the guardian of states’ rights, and the protector of the people’s liberty believed it was in America’s best interest to protect its industry, who would dare question the brilliant President James Madison?
Back to Today
The lesson of 1816 is clear.
America owes allegiance to no king. Executive orders are fleeting.
Madison worked to build consensus, spurring Congress to action. It was not Madison alone who reshaped America’s economic future.
The long-term success of American industry does not rest on executive orders or short-term tariff hikes. Just like in 1816, it rests with Congress.
We must deliberate, gain consensus, and pass tariffs that protect American industry, especially our defense capability and goods essential to running American society. We need to make these goods internally and defend ourselves from coercion from other countries.
May God bless the United States of America.
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