17 Aug Buy American, Hire American – The ‘Made in America’ Effect on Manufacturing
Echoing cries can be heard – America First, Made in America. The current administration’s campaign to promote products made in America by Americans has been a priority supported by Executive Order and legislation. The goal – to bring back manufacturing jobs to the American economy where manufacturing jobs have been on the decline. Since 2000 alone, the US economy has seen the disappearance of 5 million manufacturing jobs. How does putting ‘America First’ initiative impact American businesses?
Made in America
During 2017, the US trade deficit grew 12% and amounted to $568 billion – the most considerable gap in nine years. At the same time, trade with China hit record highs of $375 billion. While US exports have grown, they are still outpaced by imports. The Trump Administration has pledged to rebalance the nation’s books with the rest of the world.
To date, Trump has enacted tariffs on billions of dollars of goods, especially targeting China. He has further promised additional taxes on $200 billion worth of Chinese products in September. The goal is simple – to reduce the trade deficit and target perceived unfair trade agreements. The effects, however, are much more encompassing – looming trade wars.
How to Prepare
The traditional theory surrounding manufacturing has been outsourcing to countries with low labor costs while limiting core business operations to the United States. However, in the current political climate outsourcing labor and relying on foreign materials is risky. Pending trade wars can quickly halt the production and distribution of goods. Instead, manufacturing organizations should reduce outsourcing and focus on long-term goals gained with domestic job growth.
The benefits extend beyond risk mitigation. A recent survey showed that 57% of Americans are willing to pay extra for products produced locally. This represents a significant population whose purchasing preference can offset the cost implications of domestic products. Furthermore, domestic production ensures a higher level of quality control and assistance from major trading partners to distribute high-quality goods, such as Canada and Mexico. By making a move to ‘Made in America,’ additional jobs are created downstream in the supply chain – in warehouses, with distributors/wholesales, and in retail.
You can’t be prepared for every eventuality; however there are some things you can start preparing for now. Be ready and anticipate the coming growth in manufacturing. Prepare for up for domestic production. Coordinating with a staffing organization that specializes in manufacturing can help provide you with the on-demand workforce you need to remain an industry leader without the associated costs of managing their employees. Incorporating a blend of full-time, part-time, and temporary workers will ensure you an agile workforce able to adjust for the ebbs and flows of today’s uncertain economy. A staffing company can work with you to create a pipeline of qualified workers ready when you need them the most.
There is still much uncertainty on surrounding the impacts of how the Administration’s campaign will impact American manufacturing; however, one thing is certain – the companies that will fare the best are agile and adaptable. Ensure you are agile and ready for anything that comes your way with a team of skilled professionals behind you. Contact us to learn more.