Why these products likely won't be made in America despite Trump tariffs
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A growing number of companies say small and simple products are effectively a no-go for American production.
Why it matters: President Trump has imposed tariffs on nearly all imports with hopes of boosting the U.S. manufacturing sector.
The big picture: Items that require meticulous handiwork or carry thin profit margins — like apparel, electronics, toys and accessories — are particularly unlikely to move here, companies say.
- Pandora CEO Alexander Lacik told Bloomberg TV on Wednesday that the jewelry company had ruled out moving production to the U.S. It "simply wouldn't work for us because of us being an affordable proposition," he said.
- Tadashi Yanai, president of Uniqlo's owner Fast Retailing, recently "dismissed the notion that garment manufacturing would return to the U.S.," the Financial Times reported. The reason: the U.S. is a financial and information economy.
- And Mattel CEO Ynon Kreiz told investors this week that the company is taking steps to move more production out of China, but he gave no indication that the company would move toy manufacturing to the U.S. He told CNBC Tuesday that even with tariffs, it would still be cheaper to manufacture toys outside America.
Consumer electronics makers, meanwhile, show no signs of moving production to the U.S.
- Apple, for example, has taken steps to shift iPhone production from China to India. But Apple's been building its necessary supply chain in India for nearly a decade, and experts say it would be cost prohibitive to make an iPhone in the U.S.
- "Every consumer electronics manufacturer goes to China," Allen Walton, a Dallas based owner of an electronics business, told Wired.
The impact: What's more likely is a cascading series of price increases as the heightened duties make imports more expensive.
- For example, Mattel CFO Anthony DiSilvestro confirmed this week that the toymaker expects to raise prices "where necessary" in the U.S.
- His comments came after Trump last week acknowledged the possibility of toy shortages: "Maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more," he said.
Yes, but: Multiple automakers are considering moving production of certain vehicles to the U.S.
- Audi is making plans to move production of multiple vehicles to the U.S. to avoid Trump's tariffs, Automotive News reported.
- Volvo is said to be considering moving additional production to the U.S., though the company this week cut 5% of the workforce at its South Carolina plant, Reuters reported.
The bottom line: Small stuff is highly unlikely to be made in America.
