President Donald Trump has been preaching to buy American products. He mentioned that during his Inaugural Address on January 20 and brought it up again during his first speech in prime time to Congress that was seen on television by over 47 million people.
However, Trump has a big obstacle when it comes to buying American and that is the American consumer, who is looking more often for the best deal available.
Americans care the most about what the price is for what they purchase. In a number of surveys, American said they prefer to purchase products that are made in the U.S.A, but when the actual act of buying a product takes place, their choices have told a story that is much different.
Consumers are saying they support products made in America, until it is time to purchase them, said one analyst on Wall Street that specializes in advising different retailers.
People have become accustomed to least expensive prices after shopping for years at discount outlets such as Target and Walmart. In general, the U.S. consumer only purchases made in America products if the cost is not that much more than products made in China or Bangladesh or Vietnam.
In the U.S., 85% of consumers believe products made in the U.S. are of better quality than ones made overseas, said an industry analyst, and will pay a premium for certain products that are U.S. made.
For example, baby formula made in the U.S. is much more expensive and consumers will pay the additional cost, but they will not for shoes.
Clothing is another product that remains difficult to make in the U.S. because of prices of labor and because the consumer is willing to buy products made overseas because of the cost savings.
Analysts estimate that companies are able to charge as much as 5% more for products made in the U.S., but after that, the price becomes too high for many consumers to pay.
For example, in New York City garment workers are paid $11 per hour and that will increase in 2018 to $15. In China, the labor cost is between $2 and $3 per hour. Some clothing makers even think the price of labor in China is becoming too high and have changed to countries such as Bangladesh and Vietnam.
As Trump continues to tell Americans to buy American, it appears as though the U.S. consumer is not listening to what he has to say.
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