The Advantages of Buying American in the Print and Promo Space
Two years ago, President Donald J. Trump spoke to a crowd gathered at the headquarters of Wisconsin-based toolmaker Snap-on. Later that day, he signed an executive order that would tighten rules that award visas to skilled foreign workers and direct the federal government to enforce rules that bar foreign contractors from bidding on federal projects.
The order was the first effort to promote Trump’s “Buy American, Hire American” agenda, a focal point of his campaign.
“We’re going to do everything in our power to make sure more products are stamped with those wonderful words ‘Made in the USA,’” he stressed to the audience. “For too long, we’ve watched as our factories have been closed and our jobs have been sent to faraway lands.”
It’s a message that has resonated across various business segments, including printers, a demographic whom Trump seemingly won over early on in the polls. As some of our readers may recall, Print+Promo ran a study that was completed in August 2016 by NAPCO Media Research. (NAPCO Media is the parent company of Print+Promo.) The survey, “Make American Businesses Great Again: Corporate Leaders Choose Trump Over Clinton,” revealed then that Trump was performing favorably among print leaders, in particular. Of the 810 executives polled across the printing, consumer electronics, promotional products and nonprofit industries, 62 percent of printers said they planned to vote Republican in the 2016 presidential election, and as high as 70 percent felt Trump was better-suited to grow the economy.
But demographic or political affiliation matter very little when it comes to the success of America, something that, arguably, everyone can get behind. We all want job security, growth in manufacturing and the continued realization of the American dream.
That’s not to say the 45th president’s progress hasn’t been tracked by watchful members of the C-suite. Business confidence most certainly rose. Republican tax cuts passed in late 2017 aimed to deliver substantial economic benefits, though as two chief print industry economists admitted, it is impossible to know precisely how any one factor influences the American economy. What they did say, however, is that incentives matter.
“Increase the incentive to do something by increasing return and lower costs, and you get more of it,” Andrew D. Paparozzi, chief economist for Specialty Graphic Imaging Association (SGIA), Fairfax, Va., told me in Print+Promo’s 2019 State of the Industry Report. “The reductions in personal, corporate and pass-through business taxes in the act increased the incentive to invest and hire. It’s unlikely the economy and employment would have grown as rapidly without it.”
On Jan. 31, the White House released its own update regarding Trump’s “Buy American” initiative. Here are a few takeaways:
- Government spending on U.S.-made products has increased by $24 billion during the first two years of the administration over the previous two-year average.
- Since President Trump’s election, 503,000 manufacturing jobs have been created, compared to 78,000 in the last two years of the Obama administration.
- An average of 20,000 manufacturing jobs have been created per month since President Trump’s election, compared to 8,000 per month in the previous four years.
Not one to shy away from touting his wins, on Jan. 21, the president tweeted:
Last year was the best year for American Manufacturing job growth since 1997, or 21 years. The previous administration said manufacturing will not come back to the U.S., “you would need a magic wand.” I guess I found the MAGIC WAND – and it is only getting better!
Sounds great, right? Depends on whom you ask. The New York Times will tell you this momentum may be losing steam—in part because of the president’s own trade policies. The aforementioned White House report noted that “buying American strengthens our manufacturing and defense industrial base, including pillar industries like steel and aluminum that are vital to national security.” While tariffs on steel and aluminum imposed in 2018 led to increased employment at American steel plants, it raised costs for companies that use the metals.
These tariffs are a major issue for printers. As Warrendale, Pennsylvania’s Printing Industries of America’s (PIA), Center for Print Economics and Management and Government Affairs and Advocacy pointed out in its 2019 State of the Industry Report:
Such tariffs have been used largely as a bargaining chip for larger administration trade priorities like passage of USMCA (U.S.-Mexico-Canada Agreement, aka the new NAFTA) or a deal with China. PIA members have felt the added cost impact of such tariffs, particularly aluminum imported from the EU to make lithographic printing plates. Major print equipment suppliers announced that the U.S. Department of Commerce had granted exclusion allowing for retroactive refunds of such tariffs that had been assessed as 10-percent-pass-through surcharges to many PIA members. However, such exclusions are only good for one year and not guaranteed to be renewed. Thus, uncertainty surrounding tariffs on inputs will continue.
We’d also be remiss not to mention that Trump’s tumultuous trade war with China has disrupted supply chains and created uncertainty for American importers and exporters alike.
It’s not all bad news, though. The tariff crisis that many promotional product importers feared did not affect The Leslie Company, a manufacturer of made-to-order imprinted presentation products, specializing in binders, index tabs, presentation folders, calendars, report covers and document holders.
“This is because 99 percent of all of our raw materials are manufactured domestically in American facilities on American soil,” said Kendra Bringman, who handles marketing for the Olathe, Kansas-based supplier. “The current administration is pro American-made everything. This is heightening awareness and creating a bigger dialogue. The more we can educate people to the benefits of American-made products, the better.”
Meeting Distributor Needs
One advantage to buying American is that inventory is close at hand when needed. An overseas manufacturer isn’t going to be of much help to distributors who place an order with a quick turnaround. Just ask W. Paul Gray, general manager for Wisco Envelope, a division of Ennis Inc. Established in 1959, the Tullahoma, Tennessee-based trade printer produces over three million envelopes per day, ranging from standard to custom envelopes.
“There are some commodity envelopes produced overseas that are shipped in on container ships that find their way into the large retail establishments,” Gray explained. “Obviously, the lead times in those cases are lengthy, [ranging anywhere from two to three weeks]. That’s not the market that Wisco Envelope serves. We serve the custom-imprinted and custom envelope market, and are very proud of our quick turn times: from one day for imprinted stock envelopes to three days for custom #10 envelopes. Those turn times are essential for our customers.”
When manufacturing happens in the same location as the account management team, printers maintain control over the entire process, eliminating communication delays between involved parties.
“We want to help our distributors whose customers are in a pickle with last-minute requests or depleted inventory mishaps,” Bringman remarked. “If we can make it happen—without a rush charge—we will do everything we can to make it work. … [And,] there is not an extra charge or trans-Atlantic time delay if a distributor needs to make a last-minute shipping address change.”
She went on to say that having control allows for flexibility and personal attention to individual projects versus the cookie-cutter approach that customers often get from overseas corporations.
“Every job that processes through our facility is unique, just like every distributor we work with,” Bringman shared. “We tailor the production experience to each distributor’s needs.”
Putting Safety First
With roots dating back to 1934, Gill-line, a family-owned business located in Lenexa, Kan., produces a variety of decals, signs, labels, magnets, plastics, coasters and bumper stickers—the latter of which was invented by screen printer and company founder Forest P. Gill. Kevin Burden, Gill-line’s director of marketing, agreed that, as an American manufacturer, big pros are the ability to control quality, production times and inventory, but also added peace of mind to the list.
“When you produce, you can avoid some of the challenges of overseas products, such as extended travel times, custom issues, long production times, unknown materials or Prop 65 non-compliant materials that require further testing to be sold or labeled in California,” said Burden, who reminded distributors that as a union manufacturer, Gill-line can provide the Union Label on products and cater to those customers that request a union-made product.
Prop 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, has weighed on members of the industry prior to its August 2018 adoption. The heart of the regulation is that all businesses that fall under the law must provide a “clear and reasonable warning” before “knowingly and intentionally” exposing a person to a potentially harmful chemical. For printers, that means products including phthalates, like DINP, DEHP and DBP.
Many argued about what should bear labels or warnings. California’s Office of Environmental Health Hazard Assessment (OEHHA) is seeking to remove the ambiguity through its Prop 65 warnings website, containing more than 50 fact sheets on applicable chemicals and places that may expose people to them, including restaurants, enclosed parking facilities and service stations.The case is ongoing and suppliers and distributors are encouraged to monitor this complicated debate to see how it affects them.
“It is difficult to speak for all American factories, but we know all components or materials that go into our products comply with government rules and regulations,” Burden asserted. “Material data safety sheets are required for all substances we use in manufacturing, and, as a result, we can proudly say all Gill and [sister company] Bebco products are California Proposition 65-compliant.”
Wisco Envelope requires up-to-date safety data sheets from its suppliers that list any potential hazards to employees and customers as well. Considering that envelopes convey letters, bills and advertising into private homes and businesses, it is the responsibility of printers to put distributors’ and end-users’ minds at ease by ensuring no harmful ingredients were used in the making of that product, Gray insisted.
“Other countries are not as stringent as the U.S. to make sure all adhesives and inks are properly labeled and documented with their component parts or hazards,” he continued. “We only use adhesives and inks in our manufacturing process that are safe for our employees and customers to handle.”
Let’s not forget that safety applies to the well-being of the workers. Remember the control Bringman talked about earlier? It assures distributors don’t have to worry about, say, child labor law infringements.
“The Leslie Company has complete control of the manufacturing process, whereas importers are hoping the foreign factory is reporting the truth,” Bringman said. “All of our employees are paid fair wages [and] benefits, and are covered by workers’ compensation insurance. It’s a safe work environment both physically and mentally.”
Environmental concerns are another area to consider. Because manufacturing of its paper, window film, inks and other supplies occurs in the U.S., Wisco Envelope is confident that its envelope products are sourced and produced through environmentally sound practices. According to Gray, the company uses paper mills that are SFI- and FSC-compliant, and he expanded on the printer’s strict guidelines pertaining to safety, recycling and conservation.
“Our safety program begins the moment we interview a potential candidate and continues throughout their career with us,” he said. “Safety is an integral part of working at Wisco Envelope, as we want our employees to think ‘safety first and always.’ That sounds like a cliché, but [the] safety of our employees and visitors is put ahead of all other conversation topics and actions.”
The goal of Wisco Envelope’s recycling program is twofold. First, the company attempts to minimize waste throughout its operations. Any waste that is generated, however, gets routed to the appropriate waste stream to be recycled.
“It is important for us to be good corporate citizens by putting only the necessary items into our trash compactor,” Gray commented. “Metal plates, all plastics, paper cores, paper, corrugated cartons and boxes are all recycled through the proper procedures and paths. Additionally, we have eliminated almost all of the harsh chemicals that the facility used. They have been replaced by nontoxic alternatives.”
Being that it’s the 10th year of recovery since the last recession, there are faint whispers from financial pundits about what’s next. Dr. Ronnie H. Davis, PIA’s senior vice president and chief economist, cautioned Print+Promo’s readers just last month that the odds of a recession occurring in 2019 are at approximately 30 percent. From PIA’s 2019 State of the Industry findings, the downside risks that could lead to slower-growth scenarios and, ultimately, a recession are:
- Trade restrictions/barriers
- Labor shortages, coupled with immigration restrictions (total number, quantity and quality, age)
- Bottlenecks, such as transportation
- Costs and price pressures
- Heightened interest rates from inflation, and increases in deficit
- Other wild-card issues
Davis remained generally optimistic for print in both the short and long run, and so do the suppliers selling American-made products.
“American-made manufacturers are resilient,” Bringman enthused. “Suppliers that would like to stay relevant in the American-made product industry will continue to evolve their business model and diversify their American-made product line.”
Perhaps Gray summed it up best with his take on what American manufacturers can expect.
“The future is strong for producers of American-made items because American manufacturing has a great story to tell,” he concluded. “For some consumers, the sense of pride in buying American is important. Others want to know that the product they are buying is made with environmentally friendly materials and that the workforce who makes the product is protected with safety guidelines and is paid a livable wage.”