Resurgence of the “Made in America” Movement

The resurgence of the “Made in America” movement is a direct response to the amount of jobs, particularly manufacturing, that are being sent overseas. While importing a majority of our goods does often lead to cheaper prices, it leaves Americans with fewer jobs, overall lower incomes, and generally worse quality products. With the recent presidential election, both parties have turned their attention towards this growing movement and the dedication of federal spending to rebuild infrastructure and American manufacturing. In support of states where manufacturing jobs are heavily relied upon, the President has already imitated plans in support of his “buy American, hire American” campaign slogan. 

In early February 2017, President Trump himself made a visit to Boeing’s South Carolina manufacturing plant. This trip, which followed previous commitments from other US-based manufacturers, including Carrier, to keep re-invest in manufacturing in the US, was strictly in support of his “America First” message. President Trump is quoted saying, "Our goal as a nation must be to rely less on imports and more on products made here in the USA.” The President has also spoken of future plans and proposals, including a substantial penalty for companies who move their jobs outside of the US, in order to help kick-start growth in America’s original industry. 

And the President isn’t the only person in the country who believes in this movement. Many companies are proudly advertising their Made in America status, despite the cost and competition challenges that come with manufacturing products domestically. Keeping manufacturers inside our borders allows companies to have better control of supply chain efficiency, product quality, and results in more money in the pockets of US employees. 

What does a “Made in America” Future Look Like? 

Studies have shown that the companies whose suppliers and customers are in the same country will be the ones that ultimately survive economic recessions financial hardship. This is a result of two main factors: 

1. Intricate global supply chains have higher cost variances as a result of global politics. Additionally, risk is significantly larger leaving companies vulnerable to supply disruptions and quality control problems.
2. Labor rates, which are the primary reason why companies choose to outsource production, are slowly catching up with that of the Western world. In due time, the cost of logistics along with reduced cost savings from labor, will outweigh the cost of domestic production. 

A future where America is indeed put first looks promising for both US citizens and US industry. This movement could bring more manufacturing jobs back to the US and ultimately begin to re-balance the global economy.

How can we help? 

InsideTheBox (ITB) is a US based industrial product development consulting company. Supporting American manufacturing since 2016, ITB helps US-based manufacturers efficiently and effectively manage through the lifecycle of industrial production. Regardless if you out-source or maintain US operations, ITB can help you mitigate risk, discover cost efficiency, and improve operational performance.

Impact of TPP on Global Supply Chains

What is the TPP and How Does It Affect Me? 

The TPP—otherwise known as the Trans-Pacific Partnership—is a free-trade agreement that is held between the US and eleven other countries that all touch the Pacific Ocean (hence the name). This agreement is fairly new in its creation, having just been signed by officials in each country in February of 2016 and includes the following countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Vietnam, Singapore and the US (The US has since been removed from TPP via executive order). 

The TPP is the world’s largest trade partnership, even bigger than the North American Free Trade Agreement (NAFTA). The twelve countries involved in the TPP make up 40 percent of the world’s total gross domestic product (GDP) equivalent to $107.5 trillion, 26 percent of the global trade, and contain 793 million consumers. It’s no surprise that the TPP is going to have a huge impact on global supply chains. Understanding the impact of the US involvement can mean serious change for your global supply chain. Below are some of the pros and cons of the US’s position in the TPP and how the President’s decision will affect your operations. 

Effects of US Staying in the TPP 

Pros: 

There’s no doubt that the TPP helps to boost exports and economic growth in the now global economy. If the US is to stay involved within the TPP, the results could mean more jobs and wealth for both the US and the other eleven countries involved. US commercial exports are calculated to increase by approximately $123.5 billion, mainly in the machinery, auto, plastic and agriculture industries. The TPP would also remove the 18,000 export taxes placed on US goods to other countries, ultimately adding approximately $77 billion a year into the incomes of US workers. 

Cons: 

The potential faults in the TPP agreement means that the US opens its doors to tax-free imports from foreign nations. In many cases and industries (i.e. retail) this could mean production moving overseas to cut costs. This could mean seriously adverse effects for various job markets in the US. This would also entail the prevention of wage increases in blue collar jobs. Free trade agreements often contribute to income inequality meaning improvement in business bottom lines, but also the stalling of wages and salaries for workers. TPP encourages the procurement of cheaper goods from low-wage countries and therefore it becomes very possible to create job-loss. 

Bottom Line: 

Whether it’s a good decision or a poor one, the fate of the US in the TPP has yet to be seen. 

InsideTheBox is a US based industrial product development company offering logistics consulting services. As we are a company built by manufacturers serving manufacturers, naturally we are monitoring how the US’s involvement with the TPP will affect our industrial manufacturing industry and its workers.