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While tariffs may be a controversial topic to many, as an economic tool thoughtfully implemented, they can play a crucial role in fostering local economic development at both the local and national levels. By strategically adjusting the cost equation for imported goods, tariffs can help create the economic conditions allowing local businesses to thrive while encouraging consumers to "think local" with their purchasing decisions.

On a national level, targeted tariffs can help protect strategic industries and reduce dangerous dependencies on foreign suppliers. The COVID-19 pandemic provided a stark illustration of this vulnerability when global supply chains collapsed, leaving many countries scrambling for essential goods. By 2020, the U.S. had become dangerously dependent on foreign manufacturing, with over 70% of active pharmaceutical ingredients coming from overseas. This dependency created critical shortages when global shipping slowed.

Tariffs can help correct this imbalance by making it economically viable to produce essential goods domestically. For example, when the U.S. implemented steel tariffs in 2018, domestic steel production increased by 8% within a year, creating thousands of jobs in communities where steel mills operated. These jobs, averaging $64,000 annually according to Bureau of Labor Statistics data, help sustain local economies by creating employment that supports families and generates tax revenue for community services.

Beyond national security concerns, tariffs can address harmful trade practices that undermine local production. When foreign competitors benefit from government subsidies, lower environmental standards, or exploitative labor practices, the playing field becomes unfairly tilted. A study from the Economic Policy Institute estimated that the U.S. lost 3.4 million jobs to China between 2001-2017, with manufacturing communities bearing the brunt of this displacement.

The ripple effects of these job losses extend beyond the factory floor. For every manufacturing job lost, communities lose approximately 1.6 additional jobs in services, retail, and other sectors that depend on those workers' spending. Local tax bases erode, schools struggle, and small businesses close, creating a downward spiral difficult to reverse.

Strategic tariffs can help interrupt this cycle by creating breathing room for local industries to modernize and compete. The revenue generated from tariffs can be directly reinvested in workforce development, infrastructure, and technology adoption – the foundations of competitive local economies.

At the community level, the benefits of tariffs can be amplified by complementary "buy local" initiatives. Studies consistently show that money spent at local businesses recirculates in the community at much higher rates than money spent at national chains or online retailers. The American Independent Business Alliance found that approximately 48% of revenue from local businesses recirculates locally, compared to just 14% from chain stores.

This multiplier effect means that supporting local producers creates substantially more local economic activity. When consumers can find locally-produced alternatives to imported goods – alternatives made possible in part by the protective effects of tariffs – their purchasing decisions have greater positive impact on their communities.

Critics often argue that tariffs raise prices for consumers, but this perspective overlooks several important factors.

First, when full costs of globalization are considered – including environmental damage from long-distance shipping, community economic deterioration, and increased dependence on foreign suppliers – the true price of "cheap" imports becomes much higher. Second, domestic competition can help keep prices reasonable even with tariffs in place. Third, the revenue generated by tariffs can be used to offset costs for consumers through tax reductions or targeted subsidies.

Perhaps most importantly, a strategic tariff approach recognizes that not all goods need to be produced locally. The goal isn't economic isolation but rather thoughtful balance. For goods where local production makes sense – either for security reasons, to leverage local resources and skills, or to maintain critical industrial capacity – tariffs can provide the necessary support. For goods better sourced globally, free trade remains appropriate.

An example of tariffs used by foreign countries that don’t work for America might be the in Europe.  You will find very few American automobiles in Europe; between the tariffs they have on American goods coupled with their VAT taxing system, the cost to purchase American made automobiles is far too high as compared to their European models.  This helps to protect their manufacturing base from erosion. 

For communities seeking to strengthen local economies, advocating for smart tariff policies can be part of a comprehensive approach that also includes "buy local" campaigns, workforce development programs, and zoning that supports local businesses. By aligning national trade policy with community economic development goals, we can create resilient economies at all levels.

Ultimately, tariffs represent one important tool among many for fostering truly local economies. When thoughtfully implemented as part of a comprehensive economic strategy, they can help create communities where local businesses thrive, meaningful employment abounds, and economic benefits are widely shared. Being truly-local isn’t always about just your community, it can be a countywide, statewide, or even national issue that ushers great growth and prosperity.

John Newby is a nationally recognized Publisher, Community, Chamber, Business & Alternative Media strategic consultant & speaker. His “Building Main Street, not Wall Street” column runs in 60+ communities nationwide. As the founder of Truly-Local, he helps communities, businesses, and local media build synergies to become more vibrant. He can be reached at: John@Truly-Local.org .