Report: Imports are More “Made in USA” Than Label Reveals

made_in_usa_brand_03Washington—Imported products sold in the United States from clothing to cars contain far more U.S. parts or other content and value and support significantly more American jobs than consumers or policymakers realize, according to a new report prepared for the National Retail Federation (NRF).

“Rethinking Made in America in the 21st Century” was prepared for NRF by Laura M. Baughman, a well-known Washington economist specializing in international trade and president of The Trade Partnership. The report was released today as part of activities to mark Imports Work Week.

‘Global Value Chain’

“This report looks at retailers’ worldwide sourcing of merchandise not just as a global supply chain but as a global value chain,” NRF President/CEO Matthew Shay said. “It shows the value added at each step along the way, not just in manufacturing but from the initial concept to the finished product. Even in a product that says ‘Made in China,’ much of what goes into that product is ‘Made in America.’ That means millions of American jobs for American workers regardless of what the label might say.”

What many American consumers don’t know is that imported goods with foreign labels often include significant but unrevealed amounts of U.S. content

According to the study, apparel products contain more than 70% U.S. value on average, some foreign-brand automobiles contain as much as 95% U.S. content while no U.S. car has more than 75% U.S. content, and the popular Apple iPod contains $162 in American content compared with $4 in Chinese content even though it is labeled “Made in China.”

Of $1.85 trillion in products imported in 2009, $464 billion of the value was American and 10 million U.S. jobs, or 11.2% of U.S. employment, were sustained by global supply chains in 2008, the report said.

Product origin labels are misleading because federal law allows a product to be labeled “Made in America” or “Made in USA” only if American manufacturing workers made the product and “all or virtually all” of the value of significant parts and processing that go into the product were made or done in the United States, according to the report. The determination looks only at direct manufacturing costs such as materials, labor and overhead. Non-manufacturing costs such as research and development, product design, marketing and other services are not considered even if all of those activities took place in the United States and were performed by U.S. workers.

Change in Label Laws?

The report calls on policymakers to adopt trade policies that recognize the importance of U.S. jobs tied to imported products. It recommends that both U.S. and foreign tariffs be eliminated and that non-tariff barriers such as regulations that treat imported products differently also be removed in order to recognize “21st Century global value chains.

The report specifically calls for passage of the Bipartisan Congressional Trade Priorities Act of 2014, which would “support U.S. participation in global value chains and ensure that trade agreements reflect the increasingly interrelated and multi-sector nature of trade and investment activity.”



Like this? Share it!

  • Karen Journey

    This is a
    great article about the Global Supply chain. As a “handmade in the USA” company
    I’m often asked if all the material/components of each item of our jewelry is
    made in the USA. My answer varies, for example, the gemstones I use may be
    mined in the USA, but are sent to India or China to be processed. I have an
    account on Lake Superior in Two Harbors, MN who collected agates along the Lake
    and found she had to send them to China to be processed. The “For the
    Journey” tag I use on all my jewelry is made by a USA casting company, but
    they purchase alloy and other materials that are made outside the USA. Therefore,
    what “Made in the USA” means to me and my company is just that…. it was
    designed, crafted, handmade or assembled by wonderfully talented artisans who
    live near our studio in St. Paul, MN, USA. I personally love wondering about
    all the different hands that touched the certain components I use in a design.
    There is a global mystery attached to each handmade piece that makes for an
    eclectic richness.