Chinese merchants flooded online markets to sell presidential election merchandise. USAdespite both sides of a campaign marked by hostility towards China seek to promote locally manufactured items.
More than 90 percent of the best-selling flags and caps from Donald Trump and Kamala Harris in Amazon provide the address of a seller in China, according to an analysis of Financial TimesBoth candidates state on their official websites that they only sell products made in the US.
Chinese producers interviewed by Financial Times They said they were counting on direct online sales to supporters of both candidates after orders from U.S. retailers fell amid tensions between Washington and Beijing.
Many Chinese merchants claim on their Amazon pages that their campaign flags are Donald Trump either Kamala Harris They are made in the United States to appeal to patriotic American buyers, even though they pass through U.S. customs with “made in China” labels.
The influx of cheap goods is taking a toll on American factories, which are struggling with high labor and raw material costs. Several American flag makers said the sales boost they had hoped for in an election year had not materialized as they lost market share to Chinese competitors.
Lost sales and incorrect country-of-origin labeling of products have raised the ire of U.S. manufacturers, who have accused Chinese flagship producers of undermining fair and just competition.
The backlash highlights the challenges it faces USA to reduce its dependence on Chinese products and comes at a time when the administration of Joe Biden attempts to close a trade loophole that allows Chinese groups to send shipments worth less than $800 to the United States without paying import duties.
Long-standing business
Chinese factories have been supplying campaign goods to the United States for several years. Traders in Yiwu, an eastern Chinese city with one of the world’s largest wholesale markets for manufactured goods, said they could foresee Trump’s 2016 election victory based on stronger orders from his supporters than from those of other countries. Hillary Clinton.
But growing rivalry between the US and China is making Yiwu’s wholesale purchasing business model harder to sustain. Five flag and hat vendors at the mall told the Financial Times that their orders for products for the 2024 US election are 20-30% below 2020 levels, as US wholesale buyers began sourcing from Vietnam and Cambodia.
“Our American customers don’t just want to work with good quality,” said Jack Zhang, a flag seller in Yiwu. “They want to have a more diversified supply chain, even if that means they have to pay a higher price.”
Official data from the United States International Trade Commission also point to a slowdown, showing that US imports of national flags from China fell by more than a quarter between 2022 and 2023, to $2 billion.
Despite the setbacks, Chinese traders are eager to tap into the lucrative US political market as overcapacity has pushed their profit margins to razor-thin levels at home.
“Very few markets will be able to compete with the U.S. in terms of scale and profitability,” said Zhang, the Yiwu flag seller who said he earned a 15 percent profit margin last May on a $12,000 order of flag-themed products. Donald Trump.
As wholesale channels have shrunk, Chinese-based merchants have begun launching online stores to directly target American voters. According to a search for top-selling items on Amazon using the keywords “Trump 2024 flag,” 46 of the first 48 results listed list the seller’s address in China.
There are few barriers to running a campaign-supplies business from so far away. Chinese factories say they can source designs for election flags from the Internet or create new ones themselves. Jonathan Wang, a flag seller in Yiwu, said local factories produced a flag with an image of Trump responding to the failed assassination attempt in July less than 24 hours after the attack.
“We care about the current events in the United States as much as the American people do,” Wang said, adding that for a short period the flag sold at “a premium price because of its newsworthiness.”
“It will take you a week or two in the U.S., if not longer, to start producing things,” said Cameron Johnson, a senior partner at Tidal Wave Solutions, a consultancy based in Shanghai. “In China, they can do it in a day or two, and it’s very hard to compete with them.”
Tough competition
American peers also struggle to compete with the cost advantages of Chinese manufacturers. Flag makers in Yiwu charge just 90 cents a piece for 1,000 nylon campaign flags. Carl Porter III, president of WGN Flag & Decorating Co. in Chicago, said he “couldn’t even buy raw materials to make a flag for less than $5.”
“We are aware that our product is going to be more expensive,” lamented Porter, who added that his company had lost half of its retail business to its Chinese peers in the past five years: “There is no way we can compete with Chinese labor,” he added.
After both the Democratic and Republican campaigns pledged to sell locally sourced political merchandise, many Chinese factories began hiding their identities online. Now, 15 of the 16 best-selling Trump-themed flags with a “Made in USA” logo on Amazon report a seller’s address in China.
An official at Xiankang Excellence Construction Co. in the western Chinese city of Xi’an said the inclusion of the “Made in USA” logo on a Trump flag made it one of its top-selling products on Amazon.
“We are doing what we can to meet the needs of U.S. consumers,” the official said.
American manufacturers say the popularity of such items has come at their expense. Reginald VandenBosch, vice president of sales for Valley Forge Flag, one of the largest U.S. flag makers, said the 5 to 10 percent spike in industrywide sales expected from the 2024 presidential race gave way to flat growth and, in some cases, a “significant” decline as flags made in China began to invade the market.
“The expectation was that sales were going to increase,” he said. “They just didn’t.”
“Outrageous” action
U.S. industry members said mislabeling of products’ country of origin needed to be addressed.
“This is outrageous,” said Kim Glas, executive director of the National Council of Textile Organizations. “Consumers click a button thinking they are buying something that benefits workers in Ohio, Wisconsin, New York, wherever, but they don’t realize that the photos and ‘Made in USA’ claims that appear in their search appear to be fake and that the product is made overseas at a subsidized rate and often under conditions that would not be allowed under U.S. law.”
But some Chinese manufacturers were not convinced that their labeling was to blame for their products’ high sales. Zhang, the Yiwu flag maker, said Chinese plants had developed a strength in cost and quality control that U.S. producers may take many years to match.
“American factories just aren’t as competitive as they used to be,” he said.
