Heritage: 'Buy American' can be a burden for businesses

Wednesday, January 27, 2021
Chris Woodward (OneNewsNow.com)

Made in USA (label)Concerns are being expressed about the regulatory burden imposed on federal agencies and contractors under President Joe Biden's recently signed "Buy American" executive order.

One News Now reported Tuesday on criticism from the National Taxpayers Union about that order, claiming that putting those "more restrictive" policies in place only further exacerbates America's trade problems. Now, a spokeswoman for The Heritage Foundation – who explains that her organization is a proponent of American businesses – warns the Biden policy itself "is not really as good as it sounds."

"The reason for that," says Tori Smith, "is because these 'Buy American' policies really act as regulations on both American producers who make everything that they make here in the United States; and those that work with an international supply chain."

According to Smith, it becomes a "big regulatory burden" when businesses are required to track down every aspect of their production to ensure they're qualified to be a government supplier.


"[That] actually results in a decrease in competition for contracts for the government because not many companies can comply with these regulations, which [in turn] increase costs for you and me as taxpayers," Smith explains – adding that that means "the government is not spending our hard-earned dollars … as wisely as they could be due to these burdensome regulations."

Having a "Buy American" policy is not new. It actually goes back decades to the 1930s and passage of the Buy American Act, something that lays out the regulations for all federal agencies and how they must go about buying things from producers.

"Over the years that has changed and we have federal, state, and local Buy American rules," says Smith. "Unfortunately, what we've seen over time is that while these policies are meant to support jobs [and] production here in the United States, they actually don't yield job growth in some of the target industries, specifically the steel industry."

Read Tori Smith's 2017 article:
'Buy American' Laws: A Costly Policy Mistake That Hurts Americans

Smith emphasizes she isn't opposed to buying from and supporting American companies; in fact, she thinks it's a great concept.

"But it needs to be the smart thing for us to do too," she continues, "because we only have so many tax dollars – and as conservatives we do believe in smaller government and lower taxes. And in order to achieve those goals, we need to be using those tax dollars wisely."

The executive order signed Monday by Biden states:

"The United States Government should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America's workers thrive."

The order also makes it harder for contractors to qualify for a waiver and sell foreign-made goods to federal agencies. Meanwhile, the order changes the rules so that more of a manufactured good's components must originate from U.S. factories.

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