Tariffs have been a big topic of conversation — their potential impact on prices and the overall economy. But talk of tariffs is also showing up in places beyond just the news, including in commercials.
Some companies have been including tariffs in their pitch to consumers, sometimes as a way to compare their prices to those of their competitors and others as a way to point out their products are made in America.
Tim Riester, founder and CEO of the Phoenix-based advertising firm Riester, joined The Show to discuss.
Full conversation
MARK BRODIE: How prevalent is it that, you know, we just heard from a few commercials that have mentioned in one way or another tariffs, like how prevalent is this?
TIM RIESTER: It's very prevalent right now. And Made in America, as a claim among advertisers, isn't a new thing. This is something that, interestingly, began back in the late 1800s.
The first documented usage was in San Francisco, in the cigar industry, and Americans were concerned because of the mass immigration of Chinese residents who were moving to the United States. And they were afraid they were going to be able to make the products much more quickly and inexpensively.
So they created a label that, really, was about prejudice. It was a white label, and it meant that the cigars were made by white people instead of by Chinese people. And that evolved into the Made in America brand that over the years we've seen use periodically.
It became very popular during World War II and after World War II. And then, probably, the greatest in modern history usage of Made in America was during the Reagan administration.
BRODIE: Yeah.
RIESTER: Even his campaign. Do you remember his campaign that it was called, “A New Day in America”?
BRODIE: Yes. Yeah, yeah.
RIESTER: He had the farmers in the sunrise. And, that's the last time we've seen Made in America as prevalent as it's becoming now.
BRODIE: Are those a little bit different, though, in the sense that — it seems to me anyway as an outsider — that some of these companies are saying, you know, our products are Made in America, which will save you money as opposed to it's a pride thing, it's a patriotic thing?
RIESTER: Yeah. And I believe that advertisers need to be very careful right now in how they proceed in using these claims really for two different reasons.
We know the consumers place quality and convenience and price at the top of the list whenever they're making a purchase decision. And we know that the willingness to pay any more for a product just because it's Made in America is very small. So I think, and when you, even the ads that you were sharing in the preview for this segment, aren't really getting into brand equity or reasons why, other than the threat of tariffs, that a product would be better or more advantageous for a consumer to purchase.
So I think consumers are going to be smarter about this.They're not going to move to our product simply because they're concerned about a tariff. They're going to be looking at what they get for their money.
BRODIE: I also wonder if there's maybe a concern about reminding consumers about tariffs? Like even if product X, you know, you can make the arguments a little bit cheaper. I would think consumers, in general, might — you know, if you forget about it, you might be more willing to buy more things, and once you're reminded: “Oh yeah. There are tariffs. Things might be more expensive.” You might shut down your purchasing even of the product that's telling you they're cheaper because of tariffs.
RIESTER: Yeah, I agree with you, Mark. And there was a study last month from Gardner. And it found that 47% of U.S. consumers expect to buy more American-made products this year, particularly because of all the news surrounding tariffs.
And so, there is a natural movement domestically due to the concern that's being elevated in the press. But conversely, the press and the up and down tariff war is really destroying the Made in America brand abroad.
And another study that just came out last month showed a 20% decline in the international perceptions of America as quality.
And I think that's really, you know, when we look at balancing the benefits of local interest within the United States and American-made products and the deterioration of the American brand abroad, it's really a difficult situation for advertisers to balance.
And I think, as we go forward, you might see vastly different types of ad messages from the same advertiser domestically versus what they're going to use internationally.
BRODIE: Yeah, I was going to ask you about that, because it seems as though there's sort of like an implied, you know, a quote unquote, “Made in America means quality.”
In addition to, you know, the patriotism and national pride and everything, it almost seems like there's an implicit “if it's Made in America, it's going to be high quality.” But as you're saying, other countries are looking at that and having almost the complete opposite reaction?
RIESTER: Indeed. And it's interesting because there are watchdog groups that are checking the facts in these claims. In the United States, the group is called the Federal Trade Commission. And if they find an untruth in an advertising claim surrounding Made in America products, per untruth or per misclaim, it's over $50,000 in fines.
And we've seen a recent case with the largest fine in history was last year: Williams-Sonoma. And this really surprised me to learn it was Williams-Sonoma, because they have developed such a high perception of their products and their brand. In 2020, they were given a warning from the Federal Trade Commission for breaching and misquoting a claim about American-made. And they made the mistake again in 2023 and had to pay $3.1 million in fines.
