President Biden’s “Buy American” Will Impact U.S. Mass Transit
The “Buy American” policy seeks to require federal infrastructure projects to use U.S. made construction materials.
Biden signed an executive order seeking to bolster these requirements.
“It’s based on his view that we are making things in America and all of America is core to our economic strategy,” a Biden administration official said.
The policy has garnered support from many.
Democrat Senator Chris Murphy of Connecticut called it “a big step in the right direction for American manufacturers.”
Rep. Mark Pocan of Wisconsin said the order was “welcome news for American workers and businesses that desperately need federal investments for their survival.”
United Auto Workers President Rory Gamble called the order “a powerful statement of solidarity with our hard-working brothers and sisters.”
American Maritime Partnership President Mike Roberts said his group is “very grateful for the administration’s support.”
The goal of the “Buying American” is to limit foreign competition which would presumably stimulate job creation and subsequently increase wages for those workers in the manufacturing industry, but some have raised concerns about potential negative impacts of what is essentially protectionism.
But according to a Congressional Research Service report, there’s more to the policy:
“For state and local providers of transportation infrastructure and services, Buy America could increase the cost of at least some projects, such as building highway bridges and procuring transit railcars and buses, and may result in fewer projects being undertaken. The price of steel produced in the United States tends to be higher than that of comparable steel produced in other countries. Buy America may also raise the cost of rolling stock procurements. The U.S. market is relatively small compared with those in other countries and regions, consequently domestic producers do not benefit from economies of scale. In addition, Buy America requirements have been blamed for project delays, which can arise from domestic supply problems, the difficulty of compliance, and the waiver application process.”
It’s a similar sentiment to what FreedomWorks, a conservative advocacy group, expressed. FreedomWorks president Adam Brandon said, “at the end of the day, [Biden’s Buy American Policy is] only going to raise the prices of what government buys with American taxpayer dollars.”
One example of this was when Amtrak wanted Japanese firm Nippon Sharyo to make more railcars, but Buy America requirements meant the company had to build a $100 million plant in America, which added exorbitant costs and delayed the project.