Cathy Paraggio always checks the label on what she buys: Is it made in China? Vietnam? Bangladesh? Mexico? Or the United States?
A long time ago, President Trump began to tell the country “to buy Americans, hire Americans”, she was “American manufacturing” movement is very trust.
In 2012, Paraggio launched a men’s swimsuit brand called NoNetz. It makes bathing suits prevent scratches and rash. Paraggio vowed to make suits in the United States. She found a textile factory in Brooklyn, MCM business, can do this work.
There was only one question: the suit cost $ 23 in Brooklyn. Made in China and shipped to Paraggio’s office only $ 10.
Paraggio told CNNMoney that the American manufacturing industry made me look like a bad business person. In any case, she went with Brooklyn. Of course, she believes that customers are more willing to see the “Made in America” label.
This is not what happened
Paraggio said, “Nobody cares about American manufacturing,” Paraggio recently made some suits for the first time from China after Stanley John, Shark Tank, frankly told us the real bottom line. So she ordered it. And cried again
Trump often preached “buy Americans”. He mentioned in his inaugural address. He made the statement (more than 47 million people) in his first prime-time speech to Congress. He became a sporting problem.
However, the biggest obstacle to Trump’s vision may be American shoppers who have been looking for a good deal.
Americans are most concerned about the price
After investigating the survey, Americans said they were more inclined to buy “Made in America” products. But when it comes to actual spending, their choice will tell a different story.
“Consumers are made in the US until they have to pay the price,” said Greg Portell, a partner at consulting firm A.T. “Kearney, who specializes in advising retailers.
Related: The Michigan American promised never to go to China
After shopping for discount retailers such as Wal-Mart (WMT) and Target (TGT) for years, people have become accustomed to cheap prices. In general, if they do not spend more than China or Germany or Bangladesh, they only buy the United States.
Paraggio first saw this trend in her business. She gets the customer’s two regular comments: they like the product, but why do you spend so much money?
A recent survey released by the Associated Press shows that nearly 75% of people want to buy Americans. But their first choice is to buy cheap items. The Boston Consulting Group has been studying the problem for many years and found that it is more complicated. When people go to the store, they also consider quality.
BCG found that 85 percent of US consumers believe that US-made products are of better quality than overseas-made products. They are willing to pay a premium for certain products made in the United States. For baby formula, they will pay more for the price. For shoes, they will not.
“Garment is one of the difficult problems of re-listing, which is a tough way to go,” said Hal Sirkin, a senior partner at BCG.
Overall, BCG estimates that US manufacturers’ companies can charge up to about 5% of the share.
Business to respond to the bottom line
Trump certainly understands this labor math. Some of his own clothes are made in China.
Zhongyu owns the factory in Brooklyn, Paraggio has been producing NoNetz swimsuit. He has been in the garment industry for 35 years, but when New York raised the minimum wage, he was worried about continuing his business. Employees in New York City have more than 11 employers who must pay $ 11 per hour. By the end of 2018, this figure will reach $ 15 per hour.
“In China, $ 2 or $ 3 per hour, and even China’s prices are too expensive, retailers are turning to countries such as Bangladesh.
I am still busy, but almost all of the small orders are below 300. Most of his customers are small businesses like NoNetz. Once they reach a certain size, they usually jump overseas for production.
“People think that the quality of American manufacturing is better, but this is not true,” Well, frankly. “It all depends on the quality and labor of the machine.”
Yu would not say that he had voted in favor, but he thanked Trump, who was talking about “Americans” in his world.
“When we hear how Trump brings back to the manufacturing industry, we are excited,” Yu told CNNMoney. “But we have to see how he will implement it.”
What can return to the United States
Whether Trump can put the manufacturing industry, let alone the work of the manufacturing industry, back to the United States, there is a lot of controversy. Robotics and automation have also taken some (if not a large part of the state-run university that says 88% of manufacturing unemployment comes from automation).
Experts say it will take more “America buy” promotions to make it happen.
BCG research shows that some industries are more mature than other industries than the United States. The reality is that wages in China and the rest of the world are on the rise, making the attractiveness of certain products there.
Sirkin said: “Computer and home appliances are at a critical point.” We see overseas manufacturing costs have risen. ”
BCG found that clothing is one of the most unlikely return processes.
“How could you buy $ 5 shorts and make it here, you absolutely can not, I tried,” sad Paraggio.