September 11, 2025

The Tariff Paradox: Why “Made Overseas” Can Mean More U.S. Jobs

The Story We’re Sold

“Made in America = more American jobs.”

It sounds right. It feels right. It’s the line that drives the tariff debate.

But here’s the problem: in many categories (ours included), that neat equation breaks the moment it meets reality.

Where We Began

For eight years we manufactured in Los Angeles. We loved the factories, the people, the grit. We wanted it to work so badly and did everything in our power to make it so — soliloquies on the importance of supporting local jobs, constant customer education, exceptional artisanal product qualities.

KOOSHOO co-founder, Jesse, at garment manufacturer's in Los Angeles

The Struggle of Manufacturing in the USA

Despite our best efforts, we were only scraping by.

Sales were slow, and every day brought emails or social comments accusing us of gouging because of our prices. It was demoralizing.

At the same time, the industry was shifting to higher-volume buyers, making minimums at our factories unattainable for us. We hired a cost accountant to map out different scenarios for survival — ending up with a complex Google Sheet showing two futures: one where we kept manufacturing in America, and one where we partnered with Fairtrade-certified facilities overseas.

The answer was clear. Staying in America meant near-certain bankruptcy. Shifting production closer to the source of our raw materials — organic cotton and natural rubber — gave us a chance not only to survive but to change an entire plastic-addicted industry (looking at you, hair accessories!).

The Shift to Overseas Manufacturing

We didn’t make the decision lightly. Even today, we maintain strong relationships with our Los Angeles partners and occasionally work with them on special projects. But ultimately, after a year of research and factory visits, we found our dream partners:

A Fairtrade-certified cut & sew in southern India, owned and operated by nuns, situated between FSC-certified rubber plantations and GOTS-certified organic cotton fields.
A fourth-generation Japanese rope-making family, leveraging their craft to create the strongest, highest-quality hair ties in the world.

The move was complete: same ethics, higher quality, lower costs. And with it, demand for plastic-free hair accessories grew — then boomed.

KOOSHOO founders manufacturing team in Japan

The Paradox of Made in America & Jobs Created

The promise of “Made in America” is that the U.S. keeps and circulates all the money created by a product, supporting jobs at every level of the supply chain. While that may be true in some industries, it doesn’t work this way in hair accessories.

When we made Twist Headbands in Los Angeles, they retailed for $25. Even then, margins were razor thin. Customers loved the product, but demand was limited, and no national retailers wanted to list it — not with competitors selling headbands for as little as $3.99.

Producing that same headband in India meant we could still pay fair, living wages throughout the supply chain and offer it for $10 in the U.S. At that price, $7.70 of every sale still stays in the U.S.

So yes, $7.70 is less than $25 — but here’s where the magic of supply and demand comes in. When made in the U.S., we sold about 1/20th the number of headbands we sell today at $10.

Here’s what that looks like in money staying in the U.S.:

100 Made-in-USA headbands at $25 = $2,500 circulating in the U.S. economy
2,000 (20x more) Made-in-India headbands at $10, with $7.70 per sale staying in the U.S. = $15,400 circulating in the U.S. economy

That’s 516% more money staying in the U.S. than if we had continued to manufacture domestically. And those numbers are just illustrative — the real figures (and jobs created) are far greater.

In economics, this is called the elasticity of demand. Somewhere between $25 and $10 lies the tipping point where a product becomes desirable enough for demand to take off. By shifting production ethically overseas, we crossed that threshold — unlocking demand that now generates far more money in the U.S. economy than we ever could have achieved at domestic prices.

And that $7.70 per product doesn’t just vanish into one person's pocket. It flows to store owners (many of them mom-and-pop shops), their staff, delivery drivers, sales agents, freight brokers, photographers, warehouse workers, and more. The wages those people earn are then spent in their own communities — at local grocers, coffee shops, and farmers’ markets.

percentage of price that stays in America on our overseas production: 77%

The New Challenge: Tariffs

Despite all this, in 2025 President Trump declared that Americans were being taken advantage of by offshored manufacturing — and imposed blanket tariffs to push companies back stateside.

On paper, it sounds great.

In practice, it doesn’t work.

We’ve always paid tariffs, but this year they jumped from 14% in January to as high as 64% by August. The stated goal is to force us back to American manufacturing.

But here’s the math: if 10% of our product price is spent on manufacturing ($1 in the example above), those tariffs simply add $0.64 to our costs (plus more when amplified through supply chain). That $10 headband becomes $11 — still far less than the $25 price tag when made domestically.

But tariffs don’t close the gap. They don’t bring us back to U.S. production because that gap is simply too wide. Instead, they just act as a regressive tax, disproportionately hurting lower- and middle-income households.

Why? Because a 10% increase in essential goods for a family earning $60,000 takes a far larger bite out of savings than the same increase for a household earning $1 million.

Rethinking “Made in America”

The phrase has become a shortcut. But value created in America doesn’t begin and end at the sewing machine.

Force production back onshore in a category that lacks demand at the required price point — not to mention the shortage of skilled labor, affordable space, and equipment — and the math flips: prices jump, demand falls, and the downstream U.S. jobs vanish.

Conversely, as our own example shows, responsibly manufacturing overseas generates 516% more money circulating in the U.S. economy than making the same product domestically ever did.

It’s time to tell a different story of “Made in America” — the story of jobs made in America by responsibly manufacturing overseas.

Not Every Industry Is the Same

Some sectors can absolutely thrive domestically: luxury apparel, technical gear, specialized textiles. Tariffs can work there because those industries already exist and can compete evenly on price. Targeted tariffs in those sectors can spur growth and create peripheral industries that build real, organic opportunity.

But blanket tariffs are a sledgehammer, not a scalpel. In industries like ours, they don’t revive manufacturing — they just add a tax to everyday life.

What You Can Do (Zero Guilt, All Agency)

Support small businesses. Buy the products you want to see more of. Share their stories.
Shop with context. Overseas production doesn’t mean value leaks away. In our case, 77% of every dollar stays in America.
Ask better of your government leaders. Invest in training, infrastructure, and realistic roadmaps — not blunt taxes that punish households already stretched thin.

The Bottom Line

“Made in America” isn’t the only way to make jobs in America.

Sometimes, the most American thing you can do is keep demand healthy, keep prices fair, and build ethical global partnerships that funnel value back into local stores, teams, and towns.

That’s the tariff paradox. And it’s the story not being told enough these days. So, please: share it onwards. Together, we can shift the narrative from spin to substance.