Do you want to order from China directly? No worries. Amazon.com has you covered.
As does Walmart, and a host of new start-up brands that have put up a YouTube ad, hung a shingle on a website and created the burgeoning China manufacturing-direct-to-American consumer market that has seen e-commerce-related imports up 254% in the first quarter of 2021 versus the same period a year ago, according to data from SEKO Logistics. Some of the biggest of these companies do not want consumers to know where their products are made and are pushing back against the country-of-origin online requirements that are part of the new COOL Online Act.
That bill, led by Sen. Tammy Baldwin (D-WI), only passed through the Commerce, Science and Transportation Committee this month but was added May 12 as an amendment to the much larger Endless Frontier Act (S. 1260), which is the darling of Sen. Chuck Schumer (D-NY), a renown China hawk.
The bipartisan COOL Online Act mandates country-of-origin labeling to be clearly and conspicuously stated in any website description of a product. This would protect Americans’ right to know where the products they buy are made and help promote goods that are made in America.
At the very least, the item could read “import”, but not even that is available on sites like Amazon or the myriad number of new companies selling everything from supplements to shoes. At least on Amazon, if you dig deep enough you can find the seller’s name. It’s often Chinese.
Given the proliferation of online shopping, the China direct to American consumer model will increasingly put American-made companies at risk. It will make it less interesting to manufacture consumer goods in the U.S., the largest consumer market in the world.
“Americans want to know where the products they buy are made,” CPA Chair Zach Mottl said. “The Senate Commerce Committee took an important step in making sure that U.S. consumers have that information when they are shopping online.”
Why would companies not want to make their product origin known?
Many people buy cars because of where their main parts are made. Take German cars for example. People want German cars because they are perceived as being better made by some. So they are willing to pay extra for the import and for the maintenance.
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Others prefer to buy local food or fill their homes with artwork from local artists. Craft beer is big not just because it is different than the big label lagers like Budweiser, but because millions of beer lovers have decided that they want to support local breweries.
A survey in 2020 by the Reshoring Institute showed that 70% of the 500 people surveyed said they prefer American-made products. Slightly more than 83% said they would pay up to 20% more for products made domestically.
Why Amazon and Walmart wouldn’t prefer selling American-made products at a mark-up or at least highlight them for those willing to do so, is unclear. Both companies do have Made in the USA brands available on their website. The leap to label all products shouldn’t be that difficult. For now, if you want Made in America silverware on Amazon, you’d have to specifically say so in your search. And even then you would be met with China-made products in addition to the American-made ones that pop up first, none of them labeled as imports.
What seems clear to us is that the big retail lobby does not want any more additional work to pay someone to type out “imported” or “Made in the USA” on their websites. And the margins are too good based on the volume of an ever-growing Made in China presence on U.S. E-commerce platforms. Who thinks Alibaba in China is loaded with Made in America goods?
The Reshoring Institute’s survey also showed that the country of origin influences consumers’ decisions on what to buy. Some 57% said so.
Maybe the big platforms are worried about this: two surveys last year give Made in China a black eye.
Some 40% said they will not buy Made in China products, Bloomberg reported in May 2020. Imagine Amazon losing 40% of those customers?
Two years ago, marketing consultancy Futerra surveyed consumers from around the world to find that a whopping 88% wanted their brands to make good choices, be sustainable, and “make a difference”.
There is no other country in the world where Homeland Security has more bans on product lines due to forced labor. The State Department says that the Chinese Communist Party is committing acts of genocide against Muslim minorities in far eastern Xinjiang state.
This does not mean Walmart or any small business sourcing its YouTube advertised goods directly from China are contracting firms abusing its workers. But it is clear to us, and to numerous consumer surveys, that Americans are not geared up on buying Made in China every time they go shopping. If they were given a choice, some of them would buy local. The COOL Online Act is not the total destruction of the big retailers’ new model of “buy China direct”. So why are they so dead-set against Baldwin and Schumer’s plan for labeling? Profit margins and lazy, narrow-minded thinking that often goes against what the consumers want.
We hope the Senate will choose local interests over those of multinational corporations that, for decades, have proven they are more interested in Asian jobs programs and Asian growth than they are in promoting the U.S. economy.
If the Senate is at all on board with the President’s focus on domesticating supply chains, relying less on China and industrialization in Biden’s Made in All of America plans, then keeping COOL in the Endless Frontier Act is a way to reach that goal. Americans will buy domestic. That means more demand, a stronger economy, a stronger job market, and more blue-collar manufacturing jobs for Americans, rather than more manufacturing jobs for Asians.