Today, the House is set to vote on a “jobs” bill that includes a protectionist Buy American provision that would make it harder for government agencies to waive the requirement that steel and manufactured goods used for highway and bridge projects are American made. This seeks to strengthen the previous Buy American provision that was included in the failed stimulus plan passed in February.
“Buy American” mandates in this year’s $787 billion spending package have clearly not helped create the jobs that legislators have promised. Unemployment hovers around 10%, yet populist sentiments are attempting to make the same mistake twice. According to the New York Times, employers across the country have been forced to lay off workers as a direct result of “Buy American” requirements in the bill. One factory in Pennsylvania has let go of 600 employees because some of its products include goods produced overseas.
“Buy American” mandates raise barriers to trade and endanger American businesses to retaliation from trading partners. Considering the escalating trade wars with both China and Mexico, the last thing that Congress should do is provoke trading partners further. If the federal government is serious about spurring the creation of new jobs, Congress should focus on lowering taxes and pursuing enactment of pending free trade agreements.