Disclaimer: I don’t think the current admin policies are a good way to bring back American manufacturing, if that is their main goal.
One point I don’t see discussed much is how American physical goods companies currently don’t really have access to the huge bottom chunk of the price pyramid. This limits the benefits of scale, and makes their products more expensive than they would be otherwise.
Right now if someone starts a small physical product company in America, they pretty much have to target people with excess discretionary spending ability. Once they go for the lower part of the pyramid that is much more price sensitive, they get killed by foreign competition on labor and environmental compliance costs that the American company has to pay and the foreign company does not.
If American manufacturing ever does come back, I would expect prices to come down significantly simply due to again having access to market scale.
In actuality the bottom chunk of the price pyramid being off limits is because of American business policy, not because of outside competition.
A staggering amount of Americans live around the poverty line and even more live paycheck to paycheck. They can only afford goods that are, effectively, priced at how much we value their labor in the US.
In order to solve this problem we'd need to actually raise the minimum wage and ensure Americans have more discretionary income to afford American products. But that'll never happen because businesses don't want to eat into their profit margins, so they just permanently lock themselves out of a market. It's a sort of tragedy of the markets issue.
Nope. They just have more bodies to appeal to. Especially to western companies that already captured the US/EU.
Other factors include lower cost of living, cultural factors that reduce individualism, and a semblance of basic safety nets (the ones America sucks at and is actively trying to burn the remains of). Being poor in China (or Asia in general) looks nothing like being poor in the US.
I might be seriously mistaken here, but I don't believe being poor in China is better than the US. I mean, at the very outset, you can get "soft-arrested" when you are banned from travel for being in debt. And freedoms aside, there are more in poverty in China then the US.
another issue is that at least in the short term, the "made in america" sticker is likely to be detrimental in many foreign markets
so, it might make sense for US companies selling to US customers, if they can find suppliers. but even in the cases where it works for that market, multinational companies might prefer a "made in taiwan" or "made in mexico" sticker, or they might prefer to leave the sticker off
High end discretionary consumer looking for Made in the US makes me think of something like Rogue Fitness or Room&Board. A normally Made in China/Vietnam brand specifically pointing out that they found some small third-party manufacturer that will provide the same quality you're getting from Asia (the implicit assumption is that this means low quality) is kind of priming people to not buy it.
Well, speaking from personal experience as a high end discretionary consumer, I buy almost exclusively products made in USA or Europe. So unless the companies I buy from have no customers other than me, there is some slice of the market where this is working today.
One point I don’t see discussed much is how American physical goods companies currently don’t really have access to the huge bottom chunk of the price pyramid. This limits the benefits of scale, and makes their products more expensive than they would be otherwise.
Right now if someone starts a small physical product company in America, they pretty much have to target people with excess discretionary spending ability. Once they go for the lower part of the pyramid that is much more price sensitive, they get killed by foreign competition on labor and environmental compliance costs that the American company has to pay and the foreign company does not.
If American manufacturing ever does come back, I would expect prices to come down significantly simply due to again having access to market scale.