Blogaholic

“Oh, just bring the factory back from China,” people say. “People will buy things if they’re made in America!” they add. But it’s not so easy. Even when things are assembled in the United States, the parts themselves often are not, as Reuters explained in a big feature that used motorcycle and go-kart maker Monster Moto as an example:

When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist.

For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc’s (WMT.N) vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

And even worse, a lot of the reason why companies moved manufacturing overseas isn’t in pursuit of some nefarious plan to impoverish the American worker. They did it because we, the American people, demanded it through the constant hunger of lower prices. Lower prices can often only be achieved by cutting costs, and a large part of lowering corporate costs is lowering the price of labor. Or eating into a chunk of their profits.

And corporations refuse to give up on their profits.

So when companies bring manufacturing back, they raise prices. Which means fewer people buy their products, “Made in USA” label be damned. The vicious cycle continues.