Here's why it's so hard to put Trump's 'America First' promise to work

American manufacturing: Alive and well?
American manufacturing: Alive and well?

President Donald Trump wants the country to hire American and buy American. But the buying part is hard to do.

Store shelves are full of toys made in China and racks are full of clothing made in Vietnam or handbags made in Italy. Some smaller items, like scarves or knit hats, are more often "Made in the U.S.A.," but the price is likely much higher than a foreign-made alternative.

U.S. consumers buy $25 billion worth of toys every year, according to the Toy Industry Association, but barely $1.5 million of that is made domestically.

Chris Cochella is the CEO and founder of Brackitz, a "Made in the USA" toy building set sold in nearly 300 stores nationwide.

"Everyone says, 'Wow, you're made in the U.S., that's incredible. How did you do it? We support you,'" Cochella said. But that's just one side of the conversation, he explained, it quickly turns to: "What does your product cost? Is it cost-competitive on my store's shelf?"

Cochella is making it work for now, and said he expects to be profitable this year, but any change in his current U.S.-based manufacturing partnerships could put that in jeopardy.

The import data for U.S.-sold clothing and shoes is even more staggering than toys. In 2015, more than 97 percent of the clothes sold in the U.S. were imported, and more 98 percent of shoes, according to the American Apparel and Footwear Association.

The limited availability of skilled labor and infrastructure at competitive rates is what keeps the cost of producing these goods domestically much higher than doing so overseas.

But it's not impossible, as long as consumers are willing to pay for it, which isn't the case for all product categories.

Defining made in the U.S.A.
Defining made in the U.S.A.

Joseph Abboud has managed to make men's suits for the past 30 years from a factory in New Bedford, Massachusetts, where it currently produces 1,100 suits a day and employs 740 workers. Tailored Brands bought his namesake brand in 2013.

"It's great to wave the flag — I always say we're proud to be made in America — but I think our distinction is we make it well in America. And that's an important part of it, but the customer is so smart today. So I think you can't fool or you can't give the customer something that isn't worth the price" said Abboud, chief creative director of Tailored Brands.

While price is one factor that keeps consumer demand for U.S.-made goods low, the limited availability of skilled labor and higher cost of employing workers is a bigger challenge for apparel manufacturers to overcome.

"It's always challenging — manufacturing has it's ups and downs, especially with apparel being such a low-skilled sector compared to other industries," said Art Rahbar, owner of 9b Apparel in Los Angeles, which manufactures denim for several private brands.

"The cost of labor alone is over twice what it is on mainland China," explains Paul Eilenberg, merchandise manager at ADF Accessories, which imports and manufactures neckwear, ties and accessories. "That includes shipping goods from China via air into the U.S. If a product costs $12 here, I can do it for $6 over there," he added.

Phil Franzos, owner of Accurate Knitting, a knitwear manufacturer in Brooklyn, New York, remembers a time when he was one of at least 100 companies making apparel here in the U.S. Now, he said, he is one of roughly 20 manufacturers left in the area.

Despite what feels like a dwindling industry, Franzos said he senses a desire on the part of some retailers to shift some of their supply chain back to U.S. manufacturing.

On the one hand, proximity to the retailer makes his operations more attractive to retailers looking for shorter lead times.

"We survive by turnaround — we are now working on fall of 2017 for June delivery. When retailers want to go overseas they have to plan 4 to 5 months in advance and now with retail hanging in the balance, it makes it hard to plan," said Franzos.

But the comparison to the cost of manufacturing overseas never goes away, especially when your client is Wal-Mart.

David Engelhardt | Getty Images

"The problem we have is that they're expecting things from us very, very cheap, which sometimes, it's just not doable. For example, minimum wage just went up to $11 an hour. That automatically increased our cost by 30 cents a garment. They don't understand that," said Franzos.

Wal-Mart made a big splash five years ago with its push to sell more domestic-made products and work with manufacturers to re-shore foreign operations to the U.S. As part of the initiative, the world's largest retailer has a goal to purchase an additional $250 billion in products made, sourced or grown in the United States by 2023, but it has declined to give progress updates on achieving that goal.

But any major shift in demand for domestically-produced goods is going to take a lot more than just one large retailer shifting a portion of its supply chain, and it won't happen overnight.

"The only way we're going to create more manufacturing jobs, more factories here in the United States is if we make it more attractive to be here in the United States. That means a good infrastructure, that lowers transportation costs. If you're a manufacturer and have to move stuff around, you've got to be able to do it more cheaply. It means an efficient and fair tax code, so corporate tax reform would make it much easier to operate here," said Mark Zandi, chief economist at Moody's Analytics.

Shifting large parts of supply chains that are currently overseas to the United States would be a monumental shift, but the task is not entirely impossible.