By Megan Leonhardt

President Donald Trump has placed a momentous bet on revitalizing America's industrial base through a tariff regime that upends globalization and prioritizes U.S. manufacturing.

"If you want your tariff rate to be zero, then you build your product right here in America," Trump said in an April 2 speech announcing a baseline tariff of 10% on almost all imports, and higher "reciprocal" tariffs on goods from most trading partners .

The president's message sparked a stampede to the exits on Wall Street, where stocks fell more than 11% before rallying April 9 on news of a 90-day pause for some levies. But the ultimate success or failure of Trump's tariff regime, and perhaps his presidency, will be measured in the nation's heartland, where a remarkable transformation is already under way.

Driven largely by pandemic-era migration and government policies that have spurred business investment, the 20-state region between the Appalachians and Rockies has been regaining its mojo after years of economic stagnation. As a result, the nation's expansive midsection -- which encompasses Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, and Wisconsin -- is more resilient today than it has been in decades.

The heartland economy will need that resilience, and more, to cope with the near-term pain that a global trade war is likely to bring. "These new tariffs could have a significant impact on manufacturing-heavy economies in the Midwest and elsewhere, either in the form of higher costs on inputs to production, or from lower exports due to retaliatory tariffs," says Barbara Denham, lead economist for cities and regions at Oxford Economics.

In other words, the region likely wouldn't escape the damage stemming from a broader U.S. recession caused by Trump's tariff stance. The Trump administration's cuts to federal spending, and its restrictive immigration policies also threaten to slow the heartland's progress.

Yet, the groundbreaking work that business and civic leaders have done in recent years to attract investment and nurture diverse industries suggests that the region's transformation could have surprising staying power. Main Streets and metros might seem vulnerable in the face of impending changes, even those aimed at restoring American manufacturing, but the heartland's gains are more durable than they look.

Tracing the Transformation

In the past five years or so, metropolitan regions such as Columbus, Ohio; Grand Rapids, Mich.; Indianapolis; Nashville; and Austin, Texas, have become meccas for business and talent, competing for resources with the nation's largest coastal cities. The dynamism is apparent in everything from rising real estate prices to bustling restaurants to city skylines dotted with cranes.

The heartland's momentum is also evident, if harder to tease out, in demographic and economic data.

An estimated 39% of the U.S. population lived in the heartland region in 2024, according to the U.S. Census Bureau. While population growth has slowed across the U.S. in recent decades, the heartland's population ticked up by an estimated 2.65% from 2020 to 2024, compared with growth of 2.59% in the rest of the country.

The difference is incremental, but it isn't insignificant: This is the first time the heartland's population growth has outpaced that of the rest of the country since the U.S. first included all 50 states in 1959, according to Barron's analysis. Texas and Tennessee have been particular winners.

The number of heartland employers grew by more than 13.2% from 2020 to 2023, likewise outpacing the rest of the U.S., where growth totaled less than 13.1% in the same span. In the three decades before the Covid-19 pandemic, the number of heartland employers increased by just over 1% a year, compared with the national average of about 1.4%.

Nonresidential business capital expenditures within the heartland region totaled $76.9 billion in 2023, with average annual growth up 9.43% since the onset of the pandemic. States outside the heartland saw capex spending grow by 8.86% from 2020 to 2023. Postpandemic business investment in the region has outpaced investment in non-heartland states for the first time in two decades, according to Barron's analysis of data from Implan, a firm that performs advanced economic-impact modeling.

Finally, gross domestic product in the heartland states grew at an average annual rate of 2.75% in the past three years, exceeding GDP growth of 2.68% in states outside the middle of the country. This marked the first time since the 1970s that the nation's midsection generated greater economic momentum than coastal and other regions.

A combination of forces -- the heartland's low costs and skilled workforce, technological change, a once-in-century pandemic, and federal legislation passed, in part, to counter its impact -- all helped to shape the revival now under way. Bipartisan legislation funneled trillions of dollars into the region in recent years via the Chips and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act, all of which helped attract new employers and spur job growth.

Nearly half of the total Jobs Act funds awarded through the Department of Energy, for example, were for infrastructure projects in heartland states, according to a tracking tool developed by CleanPath, a clean-energy nonprofit.

At the same time, many heartland cities and regions established more-business-friendly policies, including tax incentives and grant programs, that are attracting new business ventures. Increased investment in public-private partnerships has helped to lower risks for start-ups and business relocation.

Economic development organization Tulsa Innovation Labs has been one beneficiary of these developments. With financial assistance from federal and local authorities, it has worked to make Tulsa, Okla., a leader in drone technologies. The organization attracted 18 companies to the greater Tulsa region in 2023, which could lead to the creation of an estimated 10,000 jobs over the next six years.

Affordability has been another big draw, not just for people but also for businesses, which have capitalized on the heartland's cheaper utilities, land, and taxes. The average price of electricity for commercial or industrial use was a third less in the region than in the rest of the country in January, according to the Energy Information Administration.

Affordability is becoming an "important nexus of competition," says Adam Ozimek, chief economist at the Economic Innovation Group.

The heartland also offers comparable advantages, relative to coastal states such as Florida and California, for businesses looking to mitigate the impacts of climate change and natural disasters. The vast majority of counties in the region rank low on the Federal Emergency Management Agency's national disaster index.

Columbus in many ways exemplifies the positive changes taking place. Ohio's capital city and home of Ohio State University has attracted major corporations and industrial projects, including Intel's planned $28 billion semiconductor factories in the vicinity. Military technology company Anduril Industries announced plans in January to build a $1 billion factory in Columbus.

"We've crawled through the fog of what's possible," says Kenny McDonald, president and CEO of One Columbus, an economic development corporation for the 11-county region.

Each new project and employer becomes part of a larger ecosystem, creating another touchpoint in the existing environment and leading to other opportunities, McDonald says.

Columbus' efforts aren't aimed only at attracting investments from prominent national companies. The city and metro region are providing resources for homegrown businesses to flourish, as well.

Headwinds on the Horizon

The Trump administration's tariffs could hurt some of the heartland's most important industries, at least in the near term. Perhaps the best example is the auto sector, which has developed an integrated North American supply chain now under pressure as a result of 25% tariffs on foreign-made vehicles and parts, announced on March 26. Wall Street analysts have estimated that tariffs will raise the cost of a car by roughly $5,000 to $10,000, causing a potential hit to profit margins. Stellantis announced on April 3 that it would temporarily lay off 900 U.S. employees in Michigan and Indiana due to the tariff impacts.

Trump and his administration say that tariffs will not only raise needed revenue but also revitalize America's manufacturing sector by spurring more companies to make things here. It could take years, even decades, however, to build a new manufacturing base, and such an undertaking would be "immensely costly," says James Knightley, chief international economist at ING.

"Most manufacturers can't multiply output overnight, and remember that the value of total U.S. manufacturing output last year was less than the value of goods imported by the U.S.," Knightley says. "U.S. manufacturing would need to more than double immediately to remove the need for any imports."

The 2018-19 trade war involving the U.S., China, and other trade partners led to a net decrease in manufacturing employment. The previous tariffs also failed to provide any economic boost to the heartland region, according to a National Bureau of Economic Research working paper published in 2024 by economists at the Massachusetts Institute of Technology, Harvard University, the World Bank, and the University of Zurich.

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