All hat, no cattle

Even the federal government, which spends billions of dollars buying goods as diverse as meat, salad greens, medical equipment and jet fighters, has not increased the share of what it spends at home versus what it buys overseas.

As Scott Paul, president of the Alliance for American Manufacturing, put it, “For a president who almost every day on the campaign trail said, ‘Buy American and Hire American,’ he has actually done very little to move the ball forward on that.”

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One reason for Trump’s lack of progress has been his tendency to announce new initiatives, but then to move on to other subjects with little or no follow-through.

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[Trump] issued the first of a series of executive orders that included requiring federal agencies to produce annual reports detailing their purchasing practices. Three years later, it appears that no such reports have been produced.

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[D]irect federal procurement of foreign-made products amounted to $7.8 billion, or 3.6% of the total, in fiscal 2019.

That compared with $6 billion, or 3.5% of the total, in fiscal 2016, the last year of the Obama administration.

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“To me, the fact that past Trump ‘Buy American’ orders have included explicit language that guts their ostensible intent by prioritizing trade-pact bans on ‘Buy American’ underscores both that Trump has no interest in real change, but rather exploits ‘Buy American’ proclamations for political purposes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

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“I think it was back to the first week of the Trump administration when he specifically said, ‘We’re going to ensure that energy pipelines are made in America,” the manufacturing alliance’s Paul said.

“He put together this presidential memo and that’s literally the last we heard of it. It never materialized.”

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Trump’s heavy-handed and often indiscriminate use of tariffs also has hurt many domestic manufacturers and the investment climate overall, constraining capital spending and industrial jobs.

Some provisions in Trump’s big corporate tax cuts in 2017 actually provided an incentive for American businesses to increase their offshore investments, researchers said.

The upshot is that U.S. manufacturing, ostensibly a key beneficiary of “Buy American,” has not done so well. Factory employment grew by about 500,000 in the first two years of Trump’s presidency but was flat in 2019 and by some measures fell into recession even before the pandemic.

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The number of offshore jobs that returned to the United States jumped to more than 84,100 in 2017, but last year fell back to 47,900 – less than the 54,900 in 2016.

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Under current rules, when non-Defense agencies evaluate contract bids by large competing firms, foreign-made products are treated as being 6% more expensive than their actual cost. Even so, that’s often not enough to tip the balance toward U.S. suppliers.

Trump’s July 2019 executive order would raise that to 20%, giving a much bigger leg up to domestic producers. But that higher threshold hasn’t taken effect because the White House has not yet issued proposed changes, which were due by January.

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Trump’s “Buy American” promise has also been hampered by opposition from inside his administration.

Infighting over the program reflects the larger division inside the administration over basic strategy on trade and the economy.

[Economic advisor Peter] Navarro and other hard-liners have pushed for protectionist policies, including the trade war and tariffs directed at China, and a go-it-alone break with historical U.S. allies in Europe and Asia.

More orthodox GOP conservatives see that as a shotgun approach to the global economy that will hurt the United States in the long run and gain little in the short term.

Trump himself has waffled, at times acting on protectionist instincts and at other times pulling back on policies that could dampen Wall Street.

Large business groups, including the U.S. Chamber of Commerce, have objected to expanding “Buy American,” arguing that it would burden American companies and ultimately lead to higher prices for consumers.

The oil and gas lobby pushed back against Trump’s promise to impose “Buy American” on energy projects. Trump’s latest “Buy American” order, requiring critical drugs and medical supplies to be sourced domestically, was signed on Aug. 6 — several months after the pandemic exposed shortfalls of ventilators and other personal protective equipment.

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Joe Biden laid out a similar plan in July to secure domestic production of critical medicines, hospital equipment and protective equipment. He also has a plan to bring home jobs and manufacturing, including the investment of $400 billion in domestic procurement by the government and rewriting rules that allow many foreign companies to compete for U.S. contracts as though they were American firms.

  LA Times