Made in China Olympics gear: Sensitive subject for U.S. factories

The U.S. Olympic Committee, with its Ralph Lauren-designed and Chinese-produced uniforms, has waded straight into a made-in-America debate that’s only become feistier since the recession.

A quick recap: Americans competing in the Summer Olympics in London will be clad in opening ceremony gear made in China – one of the U.S.’s main trade competitors. The women’s outfits cost $1,473; the men’s uniforms run $1,945.

Politicians, including House Speaker John Boehner and Minority Leader Nancy Pelosi, are upset. Senate Majority Leader Harry Reid has suggested that the U.S. Olympic committee “take all the uniforms, put them in a big pile and burn them.�

Why the heated words?

American manufacturing, long held to be a key driver of the recovery, shrunk for the first time in nearly three years last month. Stalling factories mean under-worked or even unemployed workers.

Though there’s been a push lately by American producers to relocate back to the U.S. from China, the Asian superpower’s manufacturing might remains a sore spot.

Remember last year, when it was discovered that miniature statues of American presidents for sale in the Smithsonian were made in China? Or how American Apparel has struggled to earn a profit through its Los Angeles plant?

The overall situation may be improving. In May, exports out of the U.S. increased slightly to $183.1 billion, about 0.2%, according to the Census Bureau on Wednesday. Imports slipped 0.6% to $231.8 billion.

Last year, the Federal Reserve Bank of San Francisco found that 88.5% of U.S. consumer spending goes to items made domestically. For each dollar spent on products made in China, such as Apple iPhones, 55 cents goes to American businesses for their marketing and sales services.

Still, however, there was a deficit of $63.5 billion in May, though it was slightly smaller than the April shortfall. China’s growth has been slowing of late, but it still has the upper hand in trade.

The goods deficit with the Asian powerhouse increased in May to $26 billion as the U.S. imported computers, telecommunications equipment and other goods. Five years ago, the shortfall was just $20.2 billion.

The U.S. conducts 13.3% of all its trade with China, which is topped as a trading partner only by Canada.

Americans aren’t the only ones fussing over the origins of their Olympic outfits, however. New Zealand’s uniforms were designed in Italy and made there, as well as in Turkey and China. British press has claimed that the United Kingdom gear – created by British designer Stella McCartney for German sportswear firm Adidas – is made in Indonesian sweatshops.

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