A study by the Carnegie Council for Ethics in International Affairs says 71% of Americans are willing to pay more for goods made by free nations. The respondents said they want to avoid over-dependence on China for critical goods and services.
7 in 10 Americans Willing to Pay More
In the study conducted last December, nearly 7 in 10 agreed to pay up to 20% more for goods made by free nations including the US. Respondents agreed to the statement “Would you as a consumer be willing to pay up to 20 percent more for a good or service that you consume if that was to purchase it from another democracy instead of a cheaper alternative from a non-democracy, particularly if it has human rights problems?”
Backlash Against ‘Made in China’
Nick Gvosdev, the Senior Fellow at Carnegie Council for Ethics in International Affairs, said that the US has the potential for making at-home products. “If there is a combination of both consumer and investor pressure to reduce dependence on China and other countries with questionable democratic credentials, shorten supply lines and bring jobs home, I could see firms marketing that more content is made at home – for instance,” he explained. For example, MacBooks assembled in its Texas plant, attract more consumers who want more locally sourced goods. It wouldn’t matter if many of the components come from China.
American companies are anticipating growing backlash against “Made in China” products. Multinationals already started looking for other Asian countries. “The data is clear. Change is afoot,” Gvosdev said. Apart from the retail consumer, there is the corporate buyer who makes the goods that consumers ultimately buy. The latter’s supply chain decisions decide the choices consumers are left with.
US Firms Prefer US Manufacturing
Bill Pollock, CEO of Optimation, said that most big US firms actually prefer US manufacturing. However, they mostly prefer it if manufacturing is new and innovative. As the manufacturing process ends up getting copied and commodified by the Chinese, Americans need to constantly innovate to compete.
“Most of our clients are not interested in using Chinese production machines, even if they are cheaper initially,” Pollack said. “The thing about Chinese technology is that they are very good at copying,” but America remains the standard in creating new technology. In other words, the US offers Yankee ingenuity and a “huge creativity head start” over China.
The US Should Take Reshoring Seriously
Following the Carnegie survey, a consumer and investor-led renaissance should start in the US.
In a Harvard business review, professors Gary Pisano and Willy Shih wrote that the US needs to consider reshoring seriously. It would have to take the issue of reshoring seriously. The sentiment on whether consumers want their products “made in the USA” doesn’t matter.
“Rebuilding a wealth-generation machine – that is restoring the ability of enterprises to develop and manufacture products in America – is the only way the country can hope to pay down its enormous deficits and maintain, let alone increase, its standard of living,” they wrote.
Made in the USA
When consumers want more American-made products, small and mid-cap companies would make a fortune. However, if major shareholders of big companies such as Nike and Apple want goods made by free nations, then the “Made in China” trend.
If major shareholders asked Apple and Nike – if they want to be part of popular ESG portfolios, that is – make their U.S. marketed goods in the U.S., or at least in Mexico, then the “Made in China” trend will stop. Besides, when China starts making everything, other big countries, including the US, make less. Thus, the economy breaks down and incomes stay still even as the market gains.
Unlike US firms with edgy advertising that promote feel-good emotions such as peace and love. Meanwhile, China goes a bit more in-your-face in its global images. “Much depends on whether those willing to pay more to avoid sourcing from China will act in their capacity to push for this,” Gvosdev remarked. The Carnegie Council implemented the survey in February and August of 2020. Around 500 respondents came from all over the United States and various professional and occupational spheres. The recent results confirm earlier findings from similar studies made in 2018 and 2019.
Watch the CNA Insider video report on “Blaming China For US Poverty And The Broken American Dream”
Will you pay more for goods made by free nations including the USA? How much more are you willing to pay? Let us know what you think about “Not Made in China?” Drop us your thoughts in the comment section below.