In recent weeks, the presidential candidates have been tussling over a familiar campaign issue in postindustrial America: how to reinvigorate manufacturing.

Former President Donald Trump, the Republican nominee, has proposed stiff tariffs on nearly all imports as a way of forcing foreign companies to make their goods in the United States, an escalation of a strategy that did not work during his 2017-21 term. “We’re going to take their factories,” Trump declared recently.

Building on the Biden administration’s approach, Vice President Kamala Harris, the Democratic nominee, has promised tax credits and more apprenticeships to strengthen factory towns and invest in advanced technologies, ensuring they “are not just invented in America but built here.”

In truth, no president can single-handedly control the growth of specific industries. Larger economic forces like recessions and exchange rates tend to play a much more powerful role. But some policies can help or hinder their progress.

What shapes industry?

Over the last four years, policy and macroeconomic factors have combined to begin reshaping the manufacturing industry. While job growth has been flat for the past two years — as interest rates have clamped down on expansion and a strong dollar has dulled exports — shifts in the composition and location of it are underway beneath the surface.

But first, a more fundamental question: Why do politicians care so much about manufacturing, anyway?

An economist would probably say manufacturing jobs tend to punch above their weight. Steel mills and auto plants have historically paid better than service-industry employers like hospitals and hotels. And since a factory’s products are sold outside the community, they bring in dollars that can then recirculate locally and increase employment. President Joe Biden often campaigned in these terms, promising to rebuild manufacturing in order to reboot the middle class.

That has gotten less true over the years, however. As unions have eroded and the industry has become more concentrated, the premium that factory workers are paid over comparable people in other industries has shrunk. Manufacturing just isn’t the engine of prosperity that it used to be.

Domestic security

Still, it is important for another reason: maintaining access to critical materials, including defense equipment and certain medical goods, in case geopolitical disruptions cut off foreign sources.

That’s why, in practice, the Biden administration has funded semiconductor and clean energy equipment production. Hundreds of billions of dollars in new subsidies also come with carrots encouraging unionized jobs with good pay and benefits, because creating employment isn’t the primary objective.

“The focus of industrial policy should be more on job quality than on job quantity, so you’ve seen some of that shift in rhetoric over the last few years,” said Todd Tucker, director of the industrial policy and trade program at the Roosevelt Institute, a think tank closely aligned with the current White House.

Private companies have responded strongly to the Inflation Reduction Act and the CHIPS and Science Act, pouring $89 billion into clean energy manufacturing and committing $400 billion to new semiconductor plants. Since fall 2022, that has not generated enough jobs to offset losses in other manufacturing sectors. But there are signs that investment is flowing toward areas that have few stable employers after many years of automation and the moving of jobs overseas, according to a Brookings Institution analysis.

The Biden administration has propelled that movement by tethering some $80 billion in incentives to investing in places that have faced disinvestment. But private-sector imperatives are also driving those trends, as companies seek to reduce risk by drawing supply chains closer to their U.S. customers, and need people and large tracts of land to do it.

Consultants who help companies find new sites often have insight into what drives their decisions. While federal incentives matter, local factors are more important. As electricity demand increases, their industrial clients need to secure reliable sources of large amounts of power, for example. And they’re increasingly interested in states where they won’t be snarled in political or community opposition.

Demographics matter

Those attributes tend to be more common in conservative-leaning states, which have also built up departments dedicated to attracting new businesses with tax incentives and assistance finding sites, and jobs have shifted in their direction. But one factor has little to do with politics: where people are moving.

As much as politicians might promote the number of jobs a manufacturing project creates, it has become more difficult for companies to fill positions. Sun Belt states have attracted more people in recent years with their lower cost of living, and manufacturers have taken notice.

“Instead of companies choosing the right location based on all of their other requirements, and the presumption is that the workers are going to come to them, companies are starting from the presumption of, where are the people moving to?” said Didi Caldwell, president and CEO at Global Location Strategies.

Nevada’s manufacturing job base grew more than 13% from the beginning of 2020 to March 2023. Some of that had to do with federal policy: For example, the state received a Commerce Department grant to develop its lithium extraction and refining sector as well as battery production and recycling, which has seeded a new industry cluster.

But the expansion has been in the works since the early 2000s, when the state began an effort to diversify its economy beyond hospitality and entertainment.

“What’s really setting Nevada apart is this desire, this open-armed approach of: Come here. We want you to be here. We’re excited about manufacturing. It’s something we want to invest in,” said Tom Simpkins, director of Manufacture Nevada, an organization dedicated to fostering the industry.

Elections matter

Even as major factories are being built with federal aid, the rest of the manufacturing industry remains in a funk. Surveys of company executives have shown order books contracting and layoffs beginning, as companies run out of the cash flow necessary to keep workers on payrolls.

One factor chilling investment is the election itself. Companies know that the outcome will affect taxes, trade policy, subsidies and regulations, so they are waiting for more clarity before carrying out new plans.

“We’re a couple of months away from a huge decision point — who controls Congress and the White House,” said Timothy Fiore, manufacturing business committee chair at the Institute for Supply Management. “I think we’re kind of stuck here until the end of the year.”