The American-Made Balancing Act

HomeWorld’s annual Made in the U.S.A. edition (July 9, 2018) marks the 10th year we’ve dedicated an entire issue to an American housewares manufacturing renaissance.

That revival was born more from rising costs and long supply chain lead times associated with Chinese goods than from patriotic consumerism or U.S. job-saving activism. That the U.S.-made movement continues to surge, though, owes plenty to such nationalistic economic ideals stoked more by today’s political rhetoric and policy.

Renewed Investment

This issue focuses on renewed investment in manufacturing facilities and people sparked by increasing demand for U.S.-made housewares. In doing so, though, it’s impossible to overlook the potential near- and far-term impact of the sweeping tariffs proposed and imposed by the White House.

You don’t have to take political sides to acknowledge potentially opposing outcomes of protective and retaliatory tariffs that could pull this country into a trade war. It’s hard to argue against trade policy that could level the import/export playing field, boost U.S. manufacturing and reduce trade deficits. However, it’s also hard to deny how steep tariffs targeting steel and aluminum from Europe and a profusion of finished products, components and materials from China could chill the U.S. retail market.

Rising Demand

Encouraging news that U.S. steel producers plan to restore or open facilities in anticipation of rising demand is offset by discouraging news that Harley-Davidson plans to move some motorcycle production to Europe to evade retaliatory EU tariffs. It reinforces concerns that a trade war could burn some of the very businesses and workers intended to benefit from U.S. industrial protectionism.

Finished housewares don’t land in the crosshairs of initial tariff proposals… yet. U.S. housewares manufacturing though, could confront escalating prices for materials and components in the line of fire by proposed tariffs.

Tariffs can be imposed much faster than factories can be built and qualified labor, now in short supply, can be hired. These are real hurdles that can’t be discounted as political and economic forces work to compel sustainable U.S. manufacturing growth.

Most Americans don’t realize how good they’ve had it with extraordinarily low prices enabled by the collusion of government-subsidized manufacturing growth in China, wide-ranging free trade pacts and cheaper foreign labor— all sanctioned by U.S. retailing’s unyielding press to deflate pricepoints.

We’ve seen before how import inflation can be a boon to U.S. manufacturing readily equipped to fill the pipeline. Reinvestment in U.S. manufacturing should be encouraged. Just as efforts to curb trade inequities and unfair practices should positively impact the future of U.S. manufacturing.

Politically Charged

Even so, protective trade policy, however well intended, can’t re-shore such an entrenched global manufacturing shift overnight. A politically charged issue with potentially indelible economic consequences requires a deft balance of tough talk and compromise. It’s not an either-or proposition. And it takes time and cooperation.

We’ll see.