In his recent State of the Union speech address, President Joe Biden showcased “Buy American” trade policies that he said would be good for U.S. workers and the economy. Many economists, trade analysts and members of the business community counter that the case for Buy American policies is much weaker than the president has stated and warn such policies could backfire on U.S businesses.
To examine the Biden administration’s approach to trade, I interviewed John Murphy, who responded in writing. Murphy is the senior vice president for international policy at the U.S. Chamber of Commerce.
John Murphy: “Buy American” rules have been a feature of U.S. law for nearly a century. The Buy American Act of 1933 applies to direct purchases by the federal government, and it mandates in many cases, the purchase of U.S.-made goods, which it defined as 100% manufactured in the U.S. with at least 50% domestic content.
On the latter point, the Trump and Biden administrations have been ratcheting up that domestic content requirement and making it harder for agencies to issue waivers. Separately, the Buy America Act of 1982 requires the use of U.S.-made iron, steel, and manufactured goods in the construction of transportation infrastructure—highways, railways, or transit systems, and it extends beyond direct purchases by the government to contractors. Finally, the Infrastructure Investment and Jobs Act (IIJA)—the recent, bipartisan infrastructure bill signed into law in 2021—has a title dubbed the Build America, Buy America Act, which extends these mandates to new industry sectors such as broadband, water and energy.