When Countries Act like Brands

For the past year, the world’s two largest economies have been involved in a tit for tat trade war which has economists talking about the next recession. The United States has imposed tariffs worth more than $360 billion on a wide range of Chinese goods. The Chinese, in turn, have responded with tariffs totaling more than $110 billion. The Council on Foreign Relations defines tariffs as taxes imposed on goods imported from a foreign country. Their purpose is to protect local industries by making imports more expensive and therefore encouraging consumers to buy from domestic manufacturers—though experts remain doubtful about their utility.  

The “Made in America” brand has been popularized by the Trump administration in an effort to bolster national pride. Other nations such as China have taken similar strides to rebrand their status in the global eye as modern, highly-developed cultures.

President Trump’s trade war is part of a wider campaign to “Make America Great Again,” a core tenet of which is bringing back manufacturing jobs from abroad. In line with this push, the White House has hosted a ‘Made in America’ Product Showcase for the past three years. At this year’s event, the President said that he wants “to build, create, and grow more products in [the United States] using American labor, American goods, and American grit. When we purchase products made in the USA, the profits stay here, the revenue stays here, and the jobs—maybe most importantly of all—they stay right here in the USA.” In 2017, Trump passed an executive order mandating that “it shall be the policy of the executive branch to maximize ... the use of goods, products, and materials produced in the United States.” Trump has used executive orders and a trade war to induce US consumers into buying American products and has made the words ‘Made in America’ central to the country’s political discourse. 

“‘Made in America’ is a brand that consumers buy and that needs to be promoted and marketed just like any other.”

‘Made in America’ is a brand that consumers buy and that needs to be promoted and marketed just like any other. Nielsen reports that across product types, 70% of consumers indicate that a good’s country of origin is “more important” or at least “equally important” as other factors when making purchasing decisions. Consumers clearly care where their products come from. That’s why multiple firms compile indices ranking how consumers perceive ‘Made in’ brands. FutureBrand’s 2019 Country Index ranks countries based on how 2,500 cross national survey respondents perceive ‘Made in’ brands. Factors that determine the strength of a country brand include product quality, environmental friendliness of the country, and the nation’s overall quality of life. As the 2019 report shares, “a country’s product [or ‘Made in’ brand] becomes a representation of a place, and people have a favorable perception (or not) based on this.”

So how do the 75 countries included in the index measure up? In 2019, Japan possessed the world’s most powerful brand, followed by Norway and Switzerland. Germany and Canada, among others, also made it into the top ten. The most impressive climber was Slovakia, rising by 24 positions. China failed to crack the top third, ranking at number 29, while the United States—despite President Trump’s attempts to the contrary—fell five points, down to number 12.

“The strength of a ‘Made in’ brand not only induces consumers to purchase products from a certain country over another, thus supporting a nation’s manufacturers, but also has numerous spill-over effects”

The strength of a ‘Made in’ brand not only induces consumers to purchase products from a certain country over another, thus supporting a nation’s manufacturers, but also has numerous spill-over effects. As FutureBrand notes, “those individuals who are more likely to buy products or services ‘Made in’ a specific country are also more likely to recommend that country to visit, would consider it for business, and also consider living in or studying there.” In this way, “a product or brand serves as a powerful symbol of social advancement for a country, and even influences a person’s decision to work, live, or play there.” Investing in developing a strong country brand, therefore, attracts consumers, investors, and even immigrants.

If tariffs and trade wars are not enough to build a nation’s brand—and evidence from the United States suggests it actually has had an opposite effect—what are other nations doing to bolster their ‘Made in’ brands? One example is Made in China 2025, which aims to transform China from being a low-end manufacturer to becoming a high-end producer of goods. Through this plan, launched in 2015, China plans to be a global leader in AI and clean energy technologies, among other things. The government wants to transform the ‘Made in China’ brand from one suggesting unreliability to one guaranteeing quality. This effort is largely modelled off of Industrie 4.0, Germany’s state-led strategic program aimed at guaranteeing that the country remains a top manufacturing power throughout the ‘fourth industrial revolution’ of rapid technological change. 

The European Union is also taking measures to ensure its manufacturers stay attractive in the face of competition from the US, China, and other nations. Horizon, an EU research and & innovation magazine, writes that despite being the world’s biggest single market with more than half a billion consumers, EU-based companies often struggle to outcompete rivals with lower costs and higher technological capabilities. The ‘Made in Europe’ label aims to counteract this by conveying the positive effects of stringent European regulations on product safety and sustainability, said Carlos Moedas, EU Commissioner for Research, Science, and Innovation at the annual European Industry Day. The scheme is a colossal drive to spur demand, encourage European consumers to buy European, and ensure the EU remains competitive in global markets.

“‘Made in’ labels reveal as much about a product as they do about its country of origin. A strong national brand can attract capital—technological and human—that drives growth. ”

‘Made in’ labels reveal as much about a product as they do about its country of origin. A strong national brand can attract capital—technological and human—that drives growth. Countries build up their national brands over decades, yet China and the European Union are among those launching ambitious programs to rehaul their brands within just several years. This is also the aim of President Trump. Cost considerations may drive US consumers towards buying goods that are ‘Made in America’ in the short run. But the strength of a national brand also depends on indicators like quality of life, environmental action, and technological innovation—and the absence of a concerted effort by the US government to remain a leader in these areas may turn consumers away from the ‘Made in America’ brand.