A “Made in the USA” tag is something patriotic Americans cherish. It’s a rare find that signals better quality and a higher price.
Those once ubiquitous and now rare tags may be returning because manufacturers are considering moving business back to the United States.
“For years, the U.S. has ceded more and more of its manufacturing to lower-cost corners of the global economy. No one expects the U.S. to again make most of the electronic gadgets, tools, toys, furniture, lighting and other household products that tally more than $500 billion a year in imports,” reported The Wall Street Journal.
“But some companies contend the U.S. has renewed its attraction,” the WSJ continued. “Wages are stable, for example, while China’s have soared. The U.S. energy boom has reduced natural gas prices and kept a lid on electricity costs. Plus, more companies want to protect designs from overseas copycats, keep closer tabs on quality control and avoid potential disruption in supply chains that span oceans.”
With closing wage gaps between American and Chinese workers, the cost and time of shipping Chinese manufactured goods to America and the costs of maintaining a Chinese office that requires frequent business trips and translators, American companies are seeing the advantages of bringing manufacturing home, explained Daily Finance.
The toymaker K’Nex is bringing the manufacturing of its popular product, Lincoln Logs, “to Burnham, Maine, after decades of being made in China,” wrote CNBC.
K’Nex hired “Pride Manufacturing, which won the three-year contract and has undergone 17 months of planning, building machinery and testing paints and strengths of the Lincoln Logs to gear up for full production in January 2015,” CNBC reported.
Some are hopeful the manufacturing homecoming will expand to multiple industries.
“As China’s cost advantages shrink, the U.S. has the potential, with investments in automation, to retrieve a share of such imported household products as TVs, vacuum cleaners and toasters," said Hal Sirkin, a Chicago-based senior partner at Boston Consulting Group, to the Journal.
U.S. firms will do it "not to be patriotic," he said, "but because they can make money," the article stated.
However, some are skeptical about a U.S. manufacturing renaissance. Suzanne McGee of The Guardian said the trend is “overstated” and a “myth.”
“Wages are rising in coastal areas like Shenzhen, but in order for a company to stay put, they’d have to feel confident that they would continue to climb (unclear) and that there were no other alternatives. The latter, at least, is clearly not the case," she wrote. "Some companies have already shifted facilities further inland in China, or even left China for Vietnam, Cambodia or (in the case of textiles) Bangladesh.”