Buy American. Sell American.
Bryan Riley /
In most parts of the country, American shoppers understand the importance of getting the best value for their dollars. This type of common sense does not apply in Washington, D.C., where one day the federal government buys $16 muffins and the next it tries to pass laws making it illegal for state and local governments to buy inexpensive foreign-made products. According to President Obama’s proposed American Jobs Act:
None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
Requiring state and local governments to spend stimulus money on U.S.-made goods, even in cases where they could save millions of dollars by purchasing foreign-made products, wastes tax dollars. These rules also create a new layer of red tape for state and local governments. According to a spokesman for the American Public Transportation Association, “It’s always a challenge to meet Buy America rules, particularly in the area of rolling stock, because they are quite complex.”
Buy American laws don’t just handicap local and state governments; they also provide corporate welfare to U.S. companies that can’t compete with foreign businesses, and they shrink export opportunities for competitive U.S. companies by encouraging other countries to maintain similar policies. As a spokesman for Intel Corporation recently testified:
One of the main methods some governments use to promote indigenous innovations is by restricting participation in government procurement activities to domestic companies and products made locally.
Although the American Jobs Act contains a disclaimer that the proposed new Buy American limits should be applied in a manner consistent with U.S. trade agreements, the spirit of the legislation runs counter to the goal of expanding trade. Representative Kevin Brady (R–TX), chairman of the House Ways and Means Committee’s Subcommittee on Trade, recently offered a better suggestion:
It is no longer enough to simply “Buy American.” To grow jobs and remain the world’s largest economy we must “Sell American” as well. Yet when American manufacturers compete around the world they often find themselves at a disadvantage—victims of an isolationist trade agenda in Congress and saddled with significantly higher product costs due to excessive regulation and an increasingly outdated tax code…. It’s time to stop blaming everyone else and time to start leading again on trade.