Trump's call to 'Buy American' isn't boosting sales of U.S. goods

President Trump's call to “Buy American’’ isn't stirring demand for U.S.-made goods, with many shoppers focused more on low prices than labels.

Even those who are willing to pay up for pricier home-grown items say finding domestic-made merchandise is easier said than done.

Trump signed an executive order on April 18 that urged government agencies to "Buy American, Hire American,'' a message of economic nationalism that he carried from the campaign trail to the Oval Office.

So far, though, it has been met with a shrug. Retail chains like J.C. Penney and Toys R Us have not seen a rise in requests for domestically made shirts, dolls or other items.

Google searches for the phrase “Made In America’’ last spiked in June just before Trump sealed the Republican nomination for president. Searches for “Made In the USA’’ have been negligible.  And companies like WeatherTech and L.L. Bean, which tout their U.S.-made automotive floor mats and rugged boots, say sales were strong long before the presidential election.

It's not that shoppers aren't interested in U.S. made goods. A 2012 survey by The Boston Consulting Group found that nine out of 10 consumers said they would pay more for domestic-produced items to keep jobs in the U.S., while four out of five agreed that purchasing American-made goods showed patriotism.

“It’s something that an overwhelming majority of people, regardless of their political affiliation agree with,’’ said Scott Paul, president of the Alliance for American Manufacturing.

But for many, prices matter more.

Carrie Aulenbacher, who manages commercial real estate in Erie, Pa., is happy with the quality of the American-made kitchen set she bought 12 years ago, which she has never had to repair or replace. But when it comes to smaller, everyday purchases, a cheaper item that was made in China will do just fine.

"If I've saved up ... I prefer something made in the USA because it's often better quality,'' Aulenbacher said. "But when deciding on a spur of the moment purchase, price comes first for me.''

Even if cost isn't a major concern, finding a blouse, pair of shoes or flat-screen TV that is produced in the U.S.  can require going to extra lengths, if it's available at all.

Franklin Dohanyos, who once worked for Chrysler, drives an extra five miles and is willing to pay a few more dollars to buy from a store where he knows the shirts have been made in the USA.

"I’ve always said, 'Buy American first,'"  said Dohanyos, who now owns a public relations firm in Royal Oak, Mich.  But "it's getting harder and harder.''

Trump's order is aimed at federal agencies, giving them 220 days to review policies that require them to buy American-made goods, and directing them to cut down on waivers and exemptions to those rules. But those policies do not cover technology like smart phones and computers which were granted a waiver in 2004. And those are just a few of the items that are largely produced outside the U.S.

"Apparel, footwear, toys, and other kinds of products all moved overseas years ago,'' said Jonathan Gold, vice-president of supply chain and customs policy for the National Retail Federation, a trade group, "and it’s very complicated to move those supply chains back to the U.S."

The migration of manufacturing across the border and overseas was caused by an array of factors, ranging from the end of the Cold War,  to approval of the North American Free Trade Agreement (NAFTA) in 1993, to a desire by companies to make products closer to the huge number of middle-class shoppers emerging in China and India, says Chris Christopher, director for U.S. macro and global economics for IHS Markit, a financial information services and analytics firm.

China's entry into the World Trade Organization in 2001 made economic borders more porous and giving U.S.-based businesses the chance to take advantage of cheaper labor. "That made things a lot easier on trade,'' Christopher says.

Cheaper labor costs in China, Vietnam and other foreign countries also helped contribute to the loss of hundreds of thousands of manufacturing jobs in the U.S.

Job losses in the textile and apparel industry were particularly steep.

Levi Strauss, the 163-year-old San Francisco-based company whose blue jeans are an emblem of Americana, closed its last owned and operated manufacturing facility in the U.S. in 2004.

It “was a difficult  decision to move away,’’ said Levi Strauss spokeswoman Andrea Hicklin. But given the required handiwork, it generally costs at least twice as much to produce a pair of jeans in the U.S. “To move manufacturing back to the U.S., there would need to be a lot of technological breakthroughs.’’

L.L. Bean has chosen to continue making its signature "Bean Boot'' within its own manufacturing division in Maine. "It's the iconic product that we have made a commitment to always make here,'' said company spokeswoman Carolyn Beem.

But such a pledge did not make financial sense for its various other products.

"It's an easy thing to say 'make things domestically,' but the infrastructure is not there,'' Beem said. "If there's going to be a move to making more, in a big way, in the USA, it's going to take time. It's not something that's going to happen overnight.''

Higher production costs in the U.S. mean higher prices for retailers, who are likely to pass those costs on to shoppers. The BCG survey found that about two-thirds of U.S. shoppers said they were willing to pay a 10% to 60% premium for items ranging from appliances to baby food if they were made domestically.

Brad Schweig, whose family has owned Sunnyland Furniture, an outdoor furniture business in Dallas, for 47 years, said his top sellers are imported brands, while U.S.-made items tend to linger.

"I have a feeling price is a big portion of that,'' Schweig said. "I feel people are all about 'Made in the USA' until it involves U.S. dollars and then it's 'do we really care?' ''

Schweig said a club chair made by Mallin Volare, a higher-quality import that is one of his store's most popular brands, costs $749. But a similar chair from Tropitone Ravello, a company that makes its furniture in California and Florida, costs $1,149. A love seat from Mallin is $1,299, while Tropitone's version is $2,029.

Schweig said that as a retailer, American-made goods appeal to him for a variety of reasons, including shorter delivery time, typically superior quality, and freedom from worrying about port strikes and other international events that can leave shipped goods in limbo.

"It's frustrating as a retailer,'' he said. "Nothing would make me happier than to have all U.S. brands.''

Even if a product is lauded for being all-American, and is priced competitively, it may still not sell if it's not the taste of the moment.

For example, the Toyota Camry, which is assembled at the Japanese company’s sprawling factory in Georgetown, Ky., is the most made-in-America vehicle in the U.S., according to a Cars.com assessment of vehicle components and assembly.

At the New York Auto Show last month, the automaker prominently featured a Camry model decked out in red, white and blue with painted lettering boasting about the sedan’s American heritage.

But sales aren’t getting a boost because of it. U.S. Camry sales fell 13.3% in the first quarter of 2017, compared with a year earlier, largely due to declining interest in mid-size sedans.

Despite the obstacles, there are retailers and manufacturers focused on buying, selling and producing U.S. based goods.

Walmart has been dogged by a reputation that it fills its aisles with low-cost items that are typically foreign-made. But the world's biggest retailer says that for its shoppers, where an item is produced is second in importance to price.

So two-thirds of what Walmart U.S. spends on merchandise is for items that are sourced, grown, made or otherwise put together in America. Walmart has also pledged to purchase an additional $250 billion in American-made, assembled or sourced products by 2023. The retailer would not say what percentage of products in Walmart stores are American produced or grown.

Among the brands currently featured both online and at Walmart stores is the “Made Here’’ towel collection, manufactured by the company 1888 Mills at a factory in Georgia, and personal hygiene products produced by Edgewell Personal Care, which Walmart says will create 272 jobs when it moves manufacturing from Canada to Dover, Del. 

Meanwhile WeatherTech, a maker of car floor mats and other car care products, said its focus on American workers, materials and factories has bolstered its appeal.

“I purchase as much American machinery as I possibly can,'' said WeatherTech CEO David MacNeil. "I use American supplied raw materials, I use American suppliers, and I hire the great American worker,"

Such sentiments have begun to matter more to shoppers like Colin Jordan.

"I never really cared to look where the products I bought were made,'' said Jordan, who works in communications and lives in Scottsdale, Ariz. "I always just made choices based on low cost and convenience. However, once this last election got underway, I started to pay a lot more attention to where things were coming from.''

Now, he seeks out local boutiques offering clothing made in the U.S. And he's been willing to pay a bit extra for watches made by the Detroit-based company Shinola. "I feel really good about the fact that the money ... will go to strengthening our own U.S. businesses, empowering the people who are working so hard to make a living right here on our own soil.''

© 2017 USATODAY.COM


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