Revealed: Meaning “made in America”
George and Lisa Winton of Swanney, Georgia, discuss the foundations of the Winton Machine Company and the meaning of “made in America.”
Gearmotion, a New York-based manufacturer, buys most of its parts from US suppliers, with around 4% of the input imported from other countries.
That’s a small percentage, but with 10% basic tariffs in effect from early April, president and CEO Dean Burrows said his company, which specializes in custom cuts and ground gear, needs to pass these price increases to its customers. That’s not because they’re not trying to find new suppliers.
“We couldn’t find any US sources that we could make our products, so we searched globally,” Burrows said.
According to an April White House press release, tariffs are intended to correct that.
But it took years to revive US manufacturing bases, and economists suspect that President Donald Trump’s tariffs are enough to bring it back to its former glory. Meanwhile, many US manufacturers relying on imports may be more likely to pass customs costs to consumers than to line up their supply chains on the re-shore.
A 2022 report from the Department of Commerce shows that nearly a third of intermediate inputs from US manufacturers are imported from other countries.
“In the short term, it’s going to hurt manufacturers. It’s going to hurt factory owners. It’s going to hurt workers,” said Nancy Chian, professor of economics at Kellogg School of Management in Northwestern. “And that means that in addition to the pain workers feel when they go to the store, they also need to pay more for the imported (items).”
The reason for shifting to suppliers is not necessarily an easy solution
Trump’s tariffs aim to position the United States as a “global superpower in manufacturing” by portraying new factories and making manufacturing investments.
“The president said early and frequently that the best way to avoid tariffs is just to come here and produce,” Trump’s top trade adviser Peter Navarro told CNBC in early April. “We’re going to go to a place where America makes things again.”
However, moving your supply chain to the US costs.
Nearly two-thirds of the 380 surveyed companies said construction of a new domestic supply chain would at least double current costs, according to a CNBC survey in April. 61% said it would be more cost-effective to move to a country with low tension.
“If the US continues to focus on China, it will be successful in moving production some degree of from China, but that won’t bring much back to the US,” Qian said. “There are many other countries that can be manufactured at a lower cost than the US.”
Even if tariffs boost US manufacturing, it will take years for new factories to go into operation. It could leave US companies looking for domestic suppliers struggling in the meantime.
Take 000Skin is a beauty company launched by Hanna Chan earlier this year. 000Skin is based in New York, but Chang sources containers for Chinese skincare products and says its manufacturing capacity is unparalleled.
“I don’t think people don’t know how much work and infrastructure it takes even to make plastic jars,” Chan said.
However, the rising costs of imports from tariffs threw her for the loop. Chang says he is looking for alternative US suppliers, but has yet to find an option that matches the quality and price of what the Chinese manufacturers can offer. She is thinking about shifting to Mexican producers, but said it’s difficult to find people willing to work with small businesses.
“I’m probably just continuing to see a partner based in China,” Chang said.
Courtney Rivenbark considered working with US manufacturers when it created apparel and jewellery brand Coco Clem in 2018.
Due to the high production costs, she distanced her and eventually pivoted into a partnership with a Chinese factory, which she said she was in line with ethical and environmental goals.
“China is very advanced in machinery, equipment and technology,” Livenberk said. “The entire supply chain exists in China. Knit, Yard, Zagotz (Global Organic Textile Standard) Certified Organic Cotton Thread.”
After Trump announced new tariffs earlier this year, Revenberk said he compared Chinese pricing with US manufacturers. She said it would take three times more to make the same sweater in the US, and that local manufacturers didn’t have the skills to create specific plus-sized clothing.
“If the infrastructure was here, I’ll move (production to the US),” Revenberk said. But “it’s very expensive. …I’m not very interested in moving outside China due to the possibility of a short-term policy change.”
How many factories and jobs are coming to the US?
That’s not that tariffs have put pressure on some companies to increase their investment in the US. Whether these moves will lead to a dramatic influx of manufacturing jobs is another question.
CRA-Z-ART – A New Jersey-based manufacturer that produces toys, activities and school supplies – announced plans in March to expand production space from 50% to 1.5 million square feet to combat tariff costs.
CRA-Z-ART chair Lawrence Rosen said it’s too early to say how many jobs the move will generate, but the company is trying to use automation “when possible” to directly reduce labor costs.
“I need to control the fate of a 102-year-old company by controlling the future and not relying on global tariffs when things can change every day,” Lawrence said. “Made in the US, we save on cargo and save on automation. … Automation allows us to produce many products at similar costs, compared to increased costs even at 10% tariffs on cargo.”
The White House website argues that Trump’s policies have spurred trillions of dollars in new manufacturing investments “that drives job growth, innovation and opportunities across every corner of the country.”
Many of these investments were under work before Trump took office.
For example, the $5 billion investment from automaker Stellantis includes plans to reopen its idling plant in Belvidere, Illinois. The transaction was first announced in 2023, which created the truck.
A spokesman for another company listed on the website, Siemens Healthineers, a German health technology company, told USA Today that some of the initiatives included in the $150 million investment in new companies have been ongoing for “a year or more,” but the project has been accelerated to address growing economic and geopolitical uncertainty.
Michael Strain, director of economic policy research at the conservative think tank American Enterprise Institute, doesn’t expect many reruns linked to tariffs.
“It’s an investment of over 10 years for businesses to set up factories in the US,” Strain said. “If tariff rates change weekly, how can businesses know if it will make a profit?”
Some data suggest that domestic manufacturing has actually been hit by tariffs, and trade policy uncertainty has encouraged some companies to tighten their wallet strings.
According to a survey by the Supply Institute, economic activity in the manufacturing sector was contracted three times in a row in May, reaching its lowest level since November, reaching its lowest level in both power contracts. Meanwhile, the Ministry of Labor said that despite an overall increase in employment, manufacturing lost around 8,000 jobs between April and May.
Susan Helper, an economics professor at Case Western Reserve University in Ohio who served as a White House staffer for both the Obama and Biden administrations, believes tariffs could be a useful tool, but the uncertainty surrounding trade policy is a “real problem.”
“I think all that companies are doing is not just investing everywhere, they’re just waiting to see how things shake up,” she said.
