On April 18th, President Trump signed a new Executive Order entitled “Buy American and Hire American.”
Within the “Buy American” sections of the new order, the rationale is stated as, “In order to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases, it shall be the policy of the executive branch to maximize…the use of goods, products, and materials produced in the United States.”
At TCS we have long railed against the unnecessary and indefensible protectionist provisions of the Berry Amendment as it pertains to the Department of Defense. First, the defense industrial base, with annual spending well above $600 billion, doesn’t need a lot of shoring up. Second, Keynesian economic theory should not be a factor in deciding what to buy for the use and protection of American troops.
As we’ve argued many times, the Pentagon should set a reasonable standard for the equipment they seek to buy, put it out for bid, and award the contract to the company meeting that standard for the best price.
American sailors, soldiers, marines and airmen deserve nothing less.
To restrict procurement to just American contractors ignores the fact that, on occasion, the best equipment is produced by a foreign manufacturer. The current waiver authority given to agency heads, for situations where there is either no American supplier at all, or where a foreign supplier provides a better product, is certain to be chilled by the Executive Order’s direction to “assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing…”.
Worse, President Trump is providing cover for Members of Congress who use “Buy American” as a backdoor form of earmarking. Clothing, tents, tarpaulins, ball bearings, a certain type of anchor and mooring chain, rolled steel and, most recently, athletic shoes, are all examples of Congressional overreach to protect not just domestic producers, but specific manufacturers in the Member’s Congressional district. This kills any consideration of the cost of the item being procured.
For American taxpayers, this is a slippery slope to higher deficits and less oversight of how our tax dollars are spent.