Made in the USA: American Consumers Willing to Open Wallets for the Label
Frye boots. Intel chips. Crayola crayons. Post-It notes. What do these brands have in common? They’re made in America.
At one time, most brands were manufactured in the U.S., but lower production costs elsewhere have spurred many companies to offshore their operations. Yet, although the label is harder to find today, “Made in the USA” still fires up a sense of pride among Americans.
This emotional attachment, along with the indisputable loss of manufacturing jobs, is why the Trump presidential campaign was so effective. His promise to “buy American, hire American” enabled him to tap into this sense of patriotism.
But are Americans ready to support his plan with their wallets? Based on the results of a new survey by ReportLinker, they could be.
For one thing, consumers do care to a certain extent where products are made. When making a purchase decision, consumers generally don’t rank origin of manufacture quite as highly as quality or price. But this factor is important to older generations, 79% of whom are more likely to be concerned by where something is made. Notably, 34% of 55-64 year-olds are more likely to be very concerned.
76% of Americans feel concerned by the #manufacturing origin of the products they buy https://ctt.ec/XNroi+ via @ReportLinker #madeinusa
With certain goods – such as food, automobiles, clothing, and beauty and personal care – origin does factor into the purchase decision. That American consumers pay more attention to the origins of their food (76% of mentions) and cars (50% of mentions) doesn’t come as a surprise. Food, of course, is often perishable, and the locavore movement has had powerful momentum over the last decade or two. So it’s understandable that people are interesting in knowing exactly where their food comes from. Further, America’s love affair with the automobile has a long and storied history, marked by much passion and devotion.
Of course, these products are also the ones that US consumers prefer to buy American. Older generations, in particular, show a clear preference for US-produced food, mentioning it 81% of the time, while women were more likely than men to say they preferred American beauty products (62% of mentions), according to ReportLinker.
For Americans, “Made in the USA” is a tremendous source of pride. Trump’s promise to “Make America Great Again” by bringing the manufacturing industry back to America was a savvy campaign strategy, and the decision to tap into this emotion turned out to be a smart political move. More than half of Americans say they believe local products are better quality than goods imported from elsewhere. This is especially true among older generations, 59% of whom feel that way, ReportLinker found. For those consumers who consider origin when buying a product, they’re more likely to believe US-made products are higher quality. They prefer to buy American food (64%), beauty and personal care (69%), and clothes (66%) for this reason. Millennials, however, are less likely than their older counterparts to see any differences in quality when choosing between American made products and imports.
More than half of Americans say they believe local products are better quality than goods #imported from elsewhere https://ctt.ec/2EWOy+
65% of Americans say they’re willing to pay more for food produced in the US https://ctt.ec/MfA9i+ #import #export #madeinusa
One challenge consumers face with locally grown food and “made in the USA” products is price. Imports have won market share in the US over the last several decades because they are substantially less expensive than American-made products. Yet survey respondents say they’re not deterred by higher-priced local goods. In fact, more than half of respondents to the ReportLinker survey say they value local products highly and are willing to pay more for them. While this is especially true for older generations, 55% of Millennials – who likely have lower budgets – are less willing to pay more.
When buying both food and cars, those consumers who pay attention to a product’s origin are also willing to pay extra for it. Sixty-five percent of survey respondents say they’re willing to pay more for local food, while 70% say they’d spend more for an American car. Of those who believe US products are of higher quality, 74% say they’d be willing to pay more.
But how much more? Is there a limit to how much of a premium American consumers are willing to pay? According to ReportLinker’s survey, 80% of those who are willing to pay extra say they’re willing to pay a 15% premium, and more than half of respondents said they’d spend 30% more for electronics made in the USA.
It’s not clear how much more American goods would cost if they were manufactured on US soil. Higher labor costs are just one component of pricing. During the campaign, President Trump proposed taxing Chinese and Mexican imports. Since the election, House Republicans have said they’d like to see a border-adjusted system that taxes all imports, according to the Wall Street Journal. These additional costs are likely to be passed along to the consumer, inevitably hurting both overseas manufacturers and the American companies who use them.
One American company and its offshore partners that will almost certainly be affected is Ivanka Trump. The president’s daughter uses overseas manufacturers – in China, Vietnam, and Indonesia – to make her branded line of clothes.
Yet some Chinese companies may have less to fear from new tariffs. Between 2000 and 2016, they have invested $8.6 billion into production facilities and other ventures in the US, the Wall Street Journal reports.
The US does offer some attractive advantages for manufacturers, including lower energy costs, automation and higher skilled workers. According to the Reshoring Initiative’s Harry Moser, in 2013-2014, the U.S. went from losing about 140,000 manufacturing jobs per year to gaining 10,000 or more annually, in part because of advancements in workforce training.
“President Obama did do a good job on skilled workforce, so the availability of toolmakers, precision machinists, welders has gotten better,” Moser told Industry Week.
Still, more than half of American consumers agree with Trump’s plan to impose tariffs as a way to create more jobs, with 65% of older generations voicing their approval, according to ReportLinker. Generally, those who take a positive view of “Made in the USA” products – both those who value the higher quality and those willing to pay more – are behind the president. That’s because more than half of US consumers believe this approach will generate more US manufacturing jobs. To them, this is an acceptable trade-off.
However, according to several economists, US manufacturers are more likely to decide to automate tasks, rather than hire higher-cost US labor. If they do, Trump’s promised jobs aren’t likely to materialize.
Despite this concern, two-thirds of those who responded to ReportLinker’s survey say they don’t view automation as a threat. In fact, more than half say they’re somewhat positive about it, and 80% say they’ll still buy American anyway.
This survey conducted by ReportLinker reached 505 online respondents representative of the US population. Interviews were conducted between March, 3rd and March, 6th 2017.