President Joe Biden’s first address to a joint session of Congress announced a great many breaks with the recent past. But in one very important way, Biden’s approach represents a depressing continuity with the defeated Trump administration: the turn from free trade to Buy American.
All the investments in the American Jobs Plan will be guided by one principle: “Buy American.”
American tax dollars are going to be used to buy American products made in America that create American jobs.
The way it should be.
“Buy American” is not a new idea. In fact, it was enacted into law in March 1933 as the final act of the Herbert Hoover administration.
The Great Depression and the Second World War discredited Hoover’s protectionism. Year by year, decade by decade, the U.S. government led the world to more open competition. Government procurement, unfortunately, has lagged far behind—a protected zone in which U.S. suppliers can overcharge U.S. taxpayers. The 2009 Recovery Act, for example, required federal purchasers to favor U.S. suppliers unless the favoritism would inflate the cost of the whole project by 25 percent or more. That’s a lot of scope for price gouging, and suppliers have made the most of it. The Peterson Institute for International Economics estimates that the existing “Buy American” rules could add about $100 billion a year to federal spending.