‘Buy American’ is a popular slogan, but is it good policy?

“The 360” shows you diverse perspectives on the day’s top stories and debates.

What’s happening

A rare moment of bipartisan agreement during the often-contentious State of the Union address on Tuesday came when President Biden pledged to use American-made materials when building the thousands of construction projects that were funded by the massive infrastructure bill he signed during his first year in office.

“When we do these projects,” Biden said. “We’re going to buy American. … On my watch, American roads, bridges and American highways are going to be made with American products as well.”

The core principle of the policy known as “Buy American” is that whenever the federal government wants to build something, it should do it using materials that are made in the U.S. Biden is far from the first president to tout this approach. His predecessor, Donald Trump, repeatedly called for the country to “buy American and hire American” and signed several executive orders designed to promote that principle. A series of laws dating back to the 1930s require the government to prefer American-made products whenever possible, but those laws include a lot of room for exceptions and experts say they’re rarely enforced.

Biden has moved to shore up those rules over the past two years. A few days after taking office, he signed an order imposing tougher standards for waivers and exceptions to Buy American rules. The $1.2 trillion bipartisan infrastructure bill that Congress passed in 2021 included a provision that expanded Buy American rules to more materials, including drywall, copper wire, fiber optic cables, and lumber. The Inflation Reduction Act Biden signed last year includes thousands of dollars in tax credits for people buying electric vehicles, but only if they’re made in North America.

Why there’s debate

The appeal of Buy American is obvious. Beyond being extremely popular with voters, the policy is seen as promoting economic growth by ensuring that tax money spent to build up the country stays in the U.S. Supporters say it also helps create high-quality blue-collar jobs at American factories — the types of jobs that have been disappearing for decades as so much manufacturing has shifted overseas. Some also make the case that recent global disruptions like the pandemic and war in Russia show the value of economic independence.

But many if not most economists say Buy American is a self-defeating policy. They argue that limiting competition for government contracts means tax money will be wasted on materials that are more expensive and often of lesser quality than what can be purchased from abroad. Others say the country’s infrastructure needs are so enormous — especially if we’re going to meet our obligations to curb climate change — that any rule that creates extra obstacles for builders will do more harm than good.

There are also concerns about how the policy will affect America’s relationship with its allies. Key strategic partners in Europe and Asia have all criticized the U.S for, in their view, turning their backs on relationships that have taken decades to build. Critics argue that America is playing a dangerous game by upsetting allies it will need if it wants to compete with China and stifle Russia’s aggression.

Perspectives

SUPPORTERS

Buy American creates good jobs for American workers

“The federal government is the number one consumer in the United States. If the federal government spends its dollars to invest in American businesses, we will see unprecedented growth in both small and large companies across the country. The hope is that it will help create and sustain good-paying, union jobs that support workers and communities alike. It is the best chance to rebuild the American middle class. Too many working people have struggled to make ends meet for far too long.” — Dave Baker, Cincinnati Enquirer

The U.S. needs to be more independent to stand up against its competitors

“The stark truth is that the United States is now staring down the twin threats of a belligerent Russia and China. And that will require a new, cold war approach. Essentially, given Russia’s invasion of Ukraine—and China’s open support—there’s more urgency than ever for bringing critical supply chains back to the United States.” — Michael Stumo, MarketWatch

The past few years shows how risky it is to rely too heavily on other countries

“The drift of Mr Biden’s policies should represent a wake-up call for European leaders. For better and for worse, the era in which free trade has been an unchallenged strategic goal in the West is over. The downsides of that consensus were exposed by populist revolts in post-industrial regions of the West, Covid-related supply-chain failures, national security concerns and the global energy crisis.” — Editorial, Guardian

With the right commitment, Buy American can help revive U.S. manufacturing

“Making Buy American work won’t happen overnight and will likely exceed the four- (or eight-) year terms allotted presidential administrations. But if policymakers can match manufacturers’ fortitude by continuing to deliver meaningful government contracts, it could deliver far greater, longer-lasting benefits for U.S. manufacturing than any tariff ever will.” — Ethan Karp, Forbes

Biden is delivering on promises Trump failed to keep

“President Biden just gave a State of the Union speech whose key themes and most enthusiastic riffs could have been lifted — albeit with more Bidenisms and fewer insults — from Trump’s populist campaign. … And there was a none-too-subtle subtext in the policy boasts: What Trump once promised, I’m delivering. A bipartisan infrastructure bill. Tougher buy-American rules. Reindustrialization. Taking on Big Pharma. Big investments in technological competition with Beijing.” — Ross Douthat, New York Times

CRITICS

With less competition, everything becomes more expensive and worse quality

“Ask any economist about ‘Buy American’ laws, and he or she will tell you: All else being equal, they are counterproductive. … They raise the average cost and lower the average quality of everything government buys. That is the inevitable consequence of limiting choices available to government purchasing managers, just as it is for ordinary consumers. Jobs created may be offset by those lost when other countries retaliate.” — Editorial, Washington Post

Promoting Buy American means wasting taxpayer dollars

“Biden looked the American people in the eye and promised to spend their money poorly, and he was applauded for it. … But by promising to double down on past mistakes and exacerbate them, Biden is ensuring taxpayers get less for their money — and special-interest groups that lobby for government protection get more for theirs.” — Dominic Pino, National Review

Building a green economy is more important than creating a few more American jobs

“Investment in clean energy matters because climate change is an existential risk, not because the US needs to push wages higher or find new jobs for pools of idle labor. … The faster and cheaper the transition to clean energy, the better — even if, perish the thought, it means handing foreigners some of the business.” — Editorial, Bloomberg

Buy American will make it harder to meet the incredible challenge of rebuilding the U.S.

“The U.S. should be concerned about building more and building faster. … Building certainly won’t get any cheaper or easier if our policies increase the cost of essential materials by making foreign purchases of them illegal. All things equal, buying American might make building in America more expensive at a time when we should be obsessed with reducing costs rather than raising them.” — Derek Thompson, The Atlantic

The U.S. can’t defeat its rivals by turning its back on its allies

“At this early stage of Cold War 2 — or whatever you want to call it — it makes sense to err on the side of deference to our allies, especially those that are in the same geographic neighborhood as China and Russia.” — Noah Smith, economic policy writer

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Photo illustration: Jack Forbes/Yahoo News; photos: Joe Raedle/Getty Images, Getty Images (2)