Democratic lawmakers in the US Congress have introduced a bill to create a new bank funded by tariffs on China, aiming to revitalize domestic manufacturing. The Industrial Bank for American Manufacturing Act, led by Representatives Ro Khanna, Tom Suozzi, and Debbie Dingell, would provide up to $15bn annually in grants, loans, and equity investments to small and medium-sized manufacturers.
Boldest industrial proposal since WWII
Khanna described the bill as “one of the boldest industrialization proposals since FDR’s industrialization efforts” and in the tradition of Alexander Hamilton’s economic policies. The bank would use revenue from section 301 tariffs on Chinese imports, directing up to 50% of collected funds—capped at $15bn per year—to rebuild manufacturing in de-industrialized areas.
Target regions include Johnstown, Pennsylvania; Lordstown, Ohio; the Downriver region of Michigan; and Lower Bucks County, Pennsylvania. Khanna emphasized that the funds would support manufacturers currently reliant on imports, enabling them to produce goods domestically.
How the bank would work
The bill creates a new fund to provide grants, loans, and equity investments, using tariff revenue that would otherwise go to the US Treasury’s general fund. Loans are capped at $500m, with any loan over $100m requiring congressional approval. Khanna stated that the bank would help “thousands of our manufacturers across America to make things here, instead of importing them.”
Manufacturing employment in the US peaked at 19.6m jobs in 1979 but has declined to about 12.6m in 2026. Despite promises from the Trump administration, data from the Bureau of Labor Statistics shows a loss of 75,000 manufacturing jobs since January 2025.
Heartland tour highlights need
Khanna recently completed a “heartland tour” across the US midwest, where he heard from a small manufacturer near Cleveland, Ohio, that needed $1m in capital to produce a part domestically but was forced to import from Asia due to lack of funding. “We have a country right now where all the capital is going to build AI, technology apps and financial firms, but we need capital also for our small and medium-sized businesses, for our manufacturers,” Khanna said.
He framed the bank as a “modern Marshall plan for America” that would develop industry beyond coastal hubs like New York and Silicon Valley, targeting the midwest, south-west, and south.
