President Trump's “Made in America” week was doomed from the start.
A Reuters-Ipsos poll out this week found 69 percent of people surveyed said price is “very important” when they buy something. Only 32 percent said making sure something is made in the United States is “very important” to them. The poll was done online, but research consulting firms and other polls finds similar results.
Walmart executives understand price is king for most American consumers, and they've used that knowledge to build one of the world's most valuable companies: “Our customers tell us that where products are made is most important second only to price,” a Walmart spokesman said when asked whether Americans care if something is made in the United States, China or elsewhere.
Trump keeps talking up “Buy American, hire American.” It's part of his plan to create the most jobs of any U.S. president yet. He brought a firetruck to the White House lawn all the way from Wisconsin this week to try to promote U.S. products. He jumped in the driver's seat, grinning and giving the media a big thumbs up.
Many have pointed out that Trump's words don't match his actions. He promotes American-made at the same time that he and his daughter Ivanka Trump manufacture their own products overseas, in countries such as Bangladesh, Indonesia and China (as a Washington Post investigation detailed). This very week, Trump’s Mar-a-Lago Club applied to hire 70 foreign workers.
The problem is a lot of Americans do what the Trumps do: They say they want to buy stuff made in the U.S.A., but when asked if they would be willing to pay more for it, they reconsider.
An Associated Press-GFK poll last year found nearly 75 percent of Americans prefer to purchase American-made goods, but only 30 percent were willing to pay more for them.
The Boston Consulting Group has studied these trends for years and concluded that companies can only charge about 5 percent more for products made in the United States. The Reuters-Ipsos poll out this week found that Republicans are the most likely to say they would be willing to pay more, although they also balk at paying more than a 5 to 10 percent premium.
Casey Bradford of Oklahoma knows that it is going to take a lot more than Trump's firetruck show to change years of American shopping habits. He runs HomeGrown Manufacturing in Bixby, Okla. It's exactly what Trump wants more of: a 100 percent American made company that does everything from clothing to helmets to tents.
“I'm not doing this to become a multibillionaire. I'm doing this to bring back manufacturing,” says Bradford. A T-shirt made in China costs $1 or less wholesale, he says. His company can do it for about $3.50. Shipping costs are lower from Oklahoma than China, but it's still a hefty premium.
Still, Bradford said the prices are close enough, especially on more custom-made items, that he has started to get inquiries from big brands like L.L. Bean. They love the idea of American-made, but their first question is always: What's the price?
The motto at HomeGrown Manufacturing is “We make it like they used to.”
“Americans have become accustomed to just going to Walmart to buy a new one when something breaks,” says Bradford, a U.S. Army veteran. “We want to produce a product that you can have for years.”
Bradford stresses quality. It's a good strategy. Eighty-five percent of U.S. consumers think American-made products are better quality than those made overseas, consulting firm BCG found. It's part of the reason some consumers are willing to consider paying more.
As a 26-year-old, Bradford has also found a growing trend where his millennial peers want to buy custom-made and local products. One of the companies HomeGrown works with, for example, is Mike's ProLids, a specialty helmet brand that started a few years ago.
“Consumers are shifting toward values not value,” consulting firm A.T. Kearney wrote in a recent report. Gen Xers, millennials and Gen Z are more likely than baby boomers are to “look for brands and retailers that do good for the world.”
It's a trend that began before Trump but appears to be picking up momentum, A.T. Kearney found. “Buy local” is part of that movement and fits the president's “Buy American” push.
Walmart has noticed it too. In 2013, the company pledged to buy more U.S.-made products. It has committed to sourcing $250 billion more in American-made products over the next decade.
That works out to around $25 billion annually, a small fraction of the nearly half a trillion in sales the company did last year alone. But, the retailer says, “not only does manufacturing products domestically create jobs — in many cases, it’s more efficient.”
“Americans are eager to support American-made products,” says Labor Secretary Alexander Acosta on a call with reporters this week.
Bradford only started his company last year, but it already has 38 employees.
He wishes Trump would follow through on his promises to put extra taxes on imports. A tariff could make his prices look even more competitive and help his bottom line, especially as his company is looking to expand.
“We've been waiting,” he says. “We need some kind of action on their part.”
The Trump administration has stalled on trade. The Trump administration launched two separate investigations in April into whether imports of steel and aluminum compromise U.S. national security, for example. They were supposed to issue their findings but June, but that hasn't yet happened.
While small domestic manufacturers like Bradford want tariffs to help their businesses, economists say costs would go up for many products, a risky proposition when customers care more about price than country of origin.
