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Foreign Direct Investment (FDI) and Supply Chain Disruption: Key Takeaways from the 1st Quarter


Foreign Direct Investment (FDI) and Supply Chain Disruption: Key Takeaways from the 1st Quarter

Foreign manufacturers are increasingly focused on how evolving “Buy American” requirements may impact them. And like most U.S. domestic manufacturers, foreign manufacturers continue facing challenges with supply chain disruption, with the grounding of the Ever Given in the Suez Canal as just the latest headache. In order to mitigate risks associated with more restrictive local sourcing requirements and complex logistical challenges, foreign manufacturers are revisiting the localization of distribution, assembly and production activities in the U.S.

Those are a few takeaways from our conversations over the past three months with dozens of business leaders from the UK, Germany, Austria, Italy, India, China, South Korea, Mexico and other countries around the world. The focus of those conversations has been navigating foreign direct investment (FDI) and supply chain disruption amid the pandemic. Below are some of the main trends we are seeing and examples of how companies are adapting.

Evolving Content Requirements

There is an increasing awareness of the risk manufacturers face tied to changing content requirements in the U.S. These risks are not totally new. However, the Biden administration is signaling that the U.S. will continue increased focus on this issue, which is expected to impact several industry sectors in particular.

On January 25, President Biden signed an executive order aimed at long-standing “Buy American” provisions the U.S. government follows in its own procurement process. The Biden order instructed the Federal Acquisition Regulatory (FAR) Council to come up with new regulations increasing the Buy American requirements and changing the way those requirements are measured. However, the Biden order does not specify how much to increase content requirements – that will be up to the FAR Council to decide by late July 2021. In the meantime, the U.S. government is already tightening its waiver process that is used to allow certain types of procurement projects to receive exceptions to some “Buy American” requirements.

Combined with higher North American content requirements in the United States-Mexico-Canada Agreement (USMCA), more foreign companies are finding themselves grappling with this issue depending on their industry sector. Those involved in government contracting are right in the crosshairs, and the building materials and information technology industries are likely to see the largest impacts. And the importance of this issue will increase if President Biden’s infrastructure legislation passes Congress.

Those content requirements are contributing to a longer-term trend: more industries are moving manufacturing into the United States. Business leaders say they have several strategic reasons for this, including improved logistics and US content requirements, but also proximity to key customers and reduced currency risks. We also continue to hear interest in Mexico as an alternative to the U.S.  While USMCA’s content and wage requirements may shift some Mexican manufacturing to the U.S., Mexico is still very much in play for FDI projects considering North America.

Moving Forward With Site Selection Amid the Pandemic

While the pandemic has made site selection difficult, many companies that are making strategic investments like those mentioned above are finding ways to carry out their location projects. However, although some travel opened up for business travelers in the 1st quarter of 2021, COVID-19 continued to disrupt many plans.

For example, several leaders of a South Korean business recently traveled to North and South Carolina for a site visit. But after their first meeting, they found out an economic developer in that meeting tested positive for COVID-19. As a result, the South Koreans had to quarantine in their hotel and conduct the remaining meetings virtually – with people who were right down the street.

We know of two other instances in the first quarter where a COVID-19 diagnosis, one in the home-country and one in the U.S. after landing, wrecked a site visit. That is part of the reason many of the visits still happening in the U.S. involve companies that already have an American presence, as travel is easier for their personnel.

Still, while international travel is down, international projects are moving forward. The key is the rapid improvement of virtual tools during the pandemic, including virtual showcases that incorporate GIS mapping data, drone footage, and other elements to help with due diligence. While companies are finding these tools extremely useful, they are also finding it more important than ever to have trusted professionals, including legal counsel, on the ground in the locations they are considering. (You can learn more about navigating virtual site selection here.) By combining the advantages of virtual site selection with an expected increase in the ability to travel this summer due to vaccinations in the U.S., foreign companies can move forward with their site selection.

Dealing With Supply Chain Disruption

There may be no clearer image of supply chain disruption than a 1,300-foot container ship walling-off the Suez Canal. But the Ever Given running aground was simply the latest example of the difficulties companies have faced for more than a year now. Manufacturers and the logistics companies serving them say the cost of shipping goods and the ability to get space for those goods have become terribly challenging.

Much of this still goes back to the inability to get products from the source, whether those products are microchips or wood. While there are fewer lockdowns worldwide now than there were last year, many plants continue operating at low capacity or are struggling to catch up to demand.

Marbach Group, a global manufacturer and supplier of die-cutting tools and equipment based in Germany with more than 20 locations worldwide, has been constantly adapting through the pandemic to address these challenges. The February freeze in Texas, for instance, contributed to a shortage of low-grade plywood that Marbach would typically use to make crates for the transportation of its products.

“In turn we had to use our own manufacturing wood for our products to build crates,” Marbach America CEO Fernando Pires says. “Since the lower-grade wood was not available, we increased our cost margins by having to use higher-grade materials for a simple transfer box for our products.”

That’s just to get their products ready for shipping. Pires has many more examples of challenges the company has faced after its products are shipped.

One-way Marbach and other companies have responded is by building up inventory. (Pires jokes his head of purchasing must have had a crystal ball, as Marbach started increasing its stock levels in January 2020.) Marbach reflects an uptick in interest for distribution and warehouse space in the Southeastern U.S., which is evidenced by the significant construction of new warehouse space in the region. Some companies are temporarily leasing warehouses so they can stock up on raw materials and finished goods to avoid shortages when supply chains are not working correctly.

Foreign manufacturers are also diversifying their supply chains and service capabilities. Some companies that traditionally had one or two suppliers of a certain type of component are now adding additional suppliers of the same component for more robust redundancy in the supply chain. Others whose supply chains were concentrated in one part of the world are looking to add geographic diversity – so the next time a country has a COVID-19 problem, they won’t be so dependent on that one area.

Likewise, companies are diversifying their service capabilities and know-how. Many foreign companies rely on key personnel from their headquarters to fly elsewhere and solve problems when needed. That’s become more challenging with COVID-19 travel restrictions, so companies are diversifying their training programs. One executive described it as onshoring skills.

Surging FDI Down the Road?

The final thing that stood out to us amid conversations with foreign business leaders in the first quarter of 2021 is the potential for a surge in FDI coming out of the pandemic. This potential comes from two key factors.

First (and as noted above), many companies remain committed to their strategic growth plans, although the pandemic may temporarily slow the pace of their investments. Second, companies have been in cash-preservation mode and have cheap borrowing options at the moment. In addition to cheap debt for expansion, investors are also hungry for higher returns and are seeking to invest in innovative foreign companies who have growth potential in markets like the U.S.

For companies that have been able to avoid a severe hit to their financial position, all of these conditions are ripe to create a jolt in FDI as the pandemic subsides.


Sam Moses and Al Guarnieri are leaders in Parker Poe’s Manufacturing & Distribution Industry Team. Sam is based in Columbia, South Carolina, and Al is based in Charlotte, North Carolina. They can be reached at and

trade policy

US Trade Policy – A Tool to Help Combat the Climate Crisis

A climate crisis is upon us—the scientific evidence is overwhelming. The question is how to respond quickly and decisively on all fronts—at both a domestic and an international level. Carbon pricing is a key mechanism that economists believe is essential to reduce carbon emissions and mitigate climate change. With this in mind, we believe the time has come to harness the power of global trade by using international trade laws to create incentives for a global economy in which the price of carbon is considered in regulating international trade flows. A new administration in Washington provides an opportunity for a more creative approach in which trade policy also serves climate policy. Indeed, President Biden explicitly stated in his climate change platform that “[w]e can no longer separate trade policy from our climate objectives.”

The Biden administration can use existing international trade laws—without delay and without legislation—to take action in response to the global climate crisis. By doing so, the US can lead the way and help shape an international regime that will provide an incentive for companies around the world to price carbon in connection with their operations or face economic consequences at the US border.

Two existing trade remedy laws facilitate such an approach: (1) Section 301 of the Trade Act of 1974 and (2) the countervailing duty law. Together or individually, these laws provide a basis for immediate action creating commercial incentives for responsible behavior by US trading partners. Thoughtful use of Section 301 and the countervailing duty law would be consistent with sound climate policy and ensure that US workers are not disadvantaged by competition with foreign industries that ignore the carbon cost of products they export to the United States.

Section 301 authorizes trade retaliation against “an act, policy, or practice of a foreign country” that “is unjustifiable and burdens or restricts United States commerce.” This broad language should be interpreted as including industrial practices that fail to recognize the cost of carbon in the production of products imported into the United States. For example, the production of steel in China benefits from low-cost, carbon-intensive manufacturing. These unpriced carbon costs disadvantage US steel companies, which compete with Chinese steel imports, no less than other Chinese government policies that directly subsidize the Chinese steel industry. The United States could utilize Section 301 to increase pressure on trading partners such as China and, absent a change in behavior, impose duties to offset the negative impact of carbon-intensive production practices on US industries.

Likewise, the US countervailing duty law is sufficiently flexible to facilitate recognition of the cost of carbon, consistent with other efforts to expand the concept of what constitutes an unfair subsidy. For example, just last year the Department of Commerce revised its countervailing duty regulations to permit currency undervaluation to be treated as a subsidy.  Under this new approach, Commerce recently determined that Vietnam’s currency practices provide an unfair advantage to Vietnamese exporters and justify the imposition of countervailing duties on Vietnamese imports. The simple point is that US trade officials have now recognized that a broader set of foreign government policies are just as pernicious as the traditional subsidization practices that have long been the basis for imposing countervailing duties to protect US workers from unfair foreign competition.

We anticipate that our suggestions could be met with skepticism on the grounds that we are advocating an expansion of traditional notions of unfair trade practices. So be it. We are in a global crisis and business as usual will not do. Our point is to cut through the red tape and bureaucratic delays that have traditionally characterized the federal government’s response to the climate crisis. If nothing else, these trade tools could serve as forcing mechanisms to incentivize more effective international cooperation to fight climate change. Better to act immediately using the international trade tools we already have at our disposal than engage in a lengthy debate over procedure while the jobs and prosperity of US citizens are threatened by imports from countries unwilling to do their part in combatting climate change. There is no time to wait.


Mark Herlach, a partner at Eversheds Sutherland, is an international lawyer with a practice focused on energy, international trade and defense matters. Mark represents a broad range of clients, including corporations, advanced-technology companies and governments. Emily Rosenblum, an associate at Eversheds Sutherland, is a member of the Energy Group and international trade practice. Emily advises clients on a wide range of regulatory and commercial issues involving international trade.



As we all saw throughout the 2020 elections, Americans and those around the world anxiously awaited the results while international and domestic trade players planned for anticipated policy and regulatory changes to come in the short and long terms. For now, some things are here to stay. Flexibility is a must for maintaining the current trends within the international trade atmosphere. Trade relations with China and Vietnam as well as new tariffs on the horizon remain critical questions. 

The next four years will undoubtedly require careful strategic planning with an emphasis on digital innovation for trade policy experts as COVID-19 continues to add an additional layer of complexity to operations while adjusting to a new administration and policy changes. 

To help you navigate the future, Global Trade talked with Washington, D.C.-based law firm Miller & Chevalier’s international trade experts Richard Mojica and Dana Watts. They weigh in on the 2020 election outcome, how international and domestic trade lane shifts can be anticipated and what traders can do to prepare now for the near future. 

“President Biden will likely continue a trade policy of protectionism,” Mojica says. “Biden’s approach would be more subtle than Trump’s, but his trade policy agenda is centered around the familiar themes of taking a hard line on China and boosting U.S. industries by increasing government purchases of U.S.-based goods and services. Further, although Biden would certainly seek to restore trade relations with long-time allies, he has signaled that his administration would focus on domestic investments before pursuing any new trade agreements. That probably includes not pursuing Phase II of the U.S.-China Agreement, in part due to growing animosity between the countries.

“On the topic of tariffs, Biden has not yet pledged to remove the tariff regime he inherited from Trump and is not likely to do so without getting something in return that would satisfy his base supporters,” Mojica adds. “Biden has also vowed to use other tools to keep China at bay, which may include economic sanctions, the tightening of export controls, anti-dumping investigations, restrictions to foreign investment and investigations into human rights abuses.”

The question on the minds of global traders is what can be done now to prepare for what’s to come and how proactive measures can solidify operations for the future. Supply chains experienced new levels of disruption throughout 2020, requiring changes in established production locations and tapping into new market opportunities for outsourcing. However, these moves do not come without a cost in some form, and right now, the right move is hard to determine beyond what has already been implemented. 

It’s important to note that prior to Donald Trump’s departure from the White House, the U.S.-China deal still remained a key issue for many American manufacturers. With Biden now officially sworn in, relations with China are a constant question. 

“For the last 2-3 years, many companies with supply chains involving China have moved all or some production out of China and into Vietnam, Malaysia and elsewhere in Asia,” Watts explains. “U.S. companies are also considering moving production to Mexico because of its proximity to the United States and the potential cost-savings associated with the U.S.-Mexico-Canada Agreement (USMCA) implemented on July 1.” 

President Biden’s “Made in America” plan–a $400 billion, four-year increase in government purchasing of U.S.-based goods and services–will further incentivize companies to take a closer look at sourcing from the U.S., where there is capacity. “Still, we continue to hear from companies that China’s supply chain ecosystem is unrivaled, so they are experiencing growing pains as they ramp up production in other countries,” Mojica notes.

Having previously served as a U.S. Customs Headquarters attorney, Mojica predicts that under the Biden administration, tariff compliance enforcement from U.S. customs will most likely continue and even become more significant. Not only does this increase the chance for penalties and investigations but also the enforcement of USCMA and importer auditing protocols. Starting from the inside out, USMCA mirrors NAFTA while adding drastic changes to specific sectors, where operating procedures are not a “one-size-fits-all” approach. For many companies, USMCA requires a careful comparison and evaluation from compliance to anticipated penalties. 

“Companies that seek to benefit from cost savings under the USMCA must have a compliance infrastructure in place to verify that its products qualify for preferential treatment under the agreement, Mojica says. “Based on our experience working with multinational companies, developing adequate internal controls requires an effort that may involve stakeholders in various departments, including procurement, finance, supply chain and legal. U.S. Customs afforded companies through the end of 2020 to get up to speed, but that grace period has since expired and will be followed by USMCA audits.”

The Phase One trade deal is an additional key topic that companies are grappling with. Which strategic planning efforts will support business and whether there will be additional conflict between the already strained relationship with China are in question. Future agreements are at a standstill as Phase One requirements have yet to be fulfilled on China’s end and show no progress. 

The question is: Now that Biden is the 46th U.S. President, what will the Phase One Deal look like? 

“Biden has criticized the Phase One deal for not addressing Chinese subsidies and support for state-owned enterprises, cybertheft, and other unfair practices,” Watts points out. 

Mojica and Watts both expect an uptick in investigations into forced labor in the supply chains of companies that import merchandise into the United States.

“The U.S. government has taken a keen interest in human rights abuses around the world, and it is charging companies to ensure that there is no forced labor in their supply chains,” Mojica says. “In response to the rise in U.S. Customs-led investigations and enforcement cases concerning imports made with forced labor, companies are taking steps to enhance their supplier due diligence efforts.”

Short-term resolutions are bleak, and the inevitable shift in policy adds more of a strain on companies aiming to determine what preparations are within their control. Specific strategies can support forward-thinking approaches in the interim, but without concrete provisions, the future does not look favorable for peaceful international relations but rather growing tensions, which are already being felt. 

The future of policies in place and the possibilities for policy implementation have yet to be fully felt under the Biden administration. The future of trade could be completely different from what companies are currently navigating on a domestic and international scale in the coming weeks and months. Nevertheless, companies would do themselves a favor by extending strategic approaches and ensuring compliance while anticipating another year of change.


Richard Mojica is a member of Washington, D.C.-based law firm Miller & Chevalier, where he counsels U.S. and international companies on how to minimize the cost of importing merchandise into the United States through strategic customs planning and duty-savings programs.

Dana Watts is counsel of Miller & Chevalier’s International Practice, focusing on customs law. She advises clients with all aspects of import compliance.


The Top Five International Trade Issues Under the New U.S. Administration

After a tumultuous stretch of international trade wars and a global economic crisis courtesy of the pandemic, the U.S. has a new president directing trade policy. What can business leaders expect from a Biden presidency as far as strategies, relations with major trading partners, and the role of the U.S. in global trade for the next few years? Early indications are that the U.S. – China relationship will remain tense, but the Biden team approach in other areas will differ greatly from the previous administration. Global partners can expect a change in tone from Washington, and there are five issues which will stand out as major differences under Biden’s leadership:

Number Five: The U.S. will reengage with the World Trade Organization (WTO), which should lead to a substantial reduction in unilateral ‘trade wars’ and tit-for-tat tariff exchanges. Under Trump, the WTO was marginalized and hamstrung by U.S. policies, as the appellate body did not have enough judges to take any action on trade disputes. Under Biden, the U.S. will be an active participant in the WTO and will use the organization to bring pressure against China and other nations on issues such as illegal support to state-owned enterprises. There is still an urgent need to reform the WTO, but the new administration seems poised to jump in and push for improvements.

Number Four: Russia is in the crosshairs. The on-again, off-again political relations between the U.S. and Russia should switch firmly to ‘off’ for the foreseeable future, as Biden’s foreign policy team has already indicated grave concerns over Russia’s meddling in Belarus as well as its treatment of protestors and dissidents such as Alexei Navalny in Russia. Biden ordered an extensive intelligence review of Russia’s actions over the last few years and will likely use the results of that report to tighten sanctions on Putin’s inner circle through the Magnitsky Act or dramatically limit trade and transactions with Russian state-owned enterprises, such as the Trump administration did with Huawei and other Chinese companies.

Number Three: The UK faces an uphill climb on their eventual U.S. trade deal. PM Boris Johnson lost an ally when President Trump left office, and the relationship with President Biden will be cordial but arm’s length. Johnson is in a tough spot, as he would like to secure a trade deal quickly to bolster his post-Brexit polling numbers, but Biden’s team is focused on the domestic agenda and probably will not see a need to negotiate this before 2022. The only way to move this deal to the front burner is to offer the U.S. one or more of the concessions it has long desired – increased access to the NHS for the U.S. pharmaceutical industry, lowered trade barriers for food imports, or improved entry into the services industry in the UK.  None of these would be popular for British voters, but Biden’s trade representative will be well-positioned to insist on key concessions.

Number Two: Biden’s team has committed early in the presidency to implement a “worker-centered trade policy” and that will color all of the legislation and trade deals that his administration will touch.  The intent of the policy is to ensure that future trade deals (including any potential participation in the CPTPP) do not harm American workers by giving the U.S. market access to foreign goods that were produced by underpaid and under-protected workers.  The flip side of this approach should be easier U.S. market entry from countries with decent labor (and environmental) standards, as the administration formulates a way to preference the ‘right’ type of imports.

The number one issue that will differ under the Biden administration is a desire to improve ties and trade opportunities with reliable partners. The tension with China will remain and potentially even deepen, but the Biden administration – stocked with committed ‘globalists’ – is going proactively tie other partners (especially fellow democracies) closer to the U.S. through increased trade and investment opportunities. Outside of North America, this will benefit Japan, South Korea, Australia, New Zealand, Israel and the European Union most of all. Rather than adjustments to existing trade deals (some of which, like the USJTA and USMCA, were just recently completed), the Biden administration will look to use bilateral investment deals to promote greater trade ties with trusted partners, especially in areas such as renewable energy and defense technology.

On the outside looking in will be Saudi Arabia, Turkey, Russia and other countries that will find in the Biden administration a trade team that is willing to substantively weigh human rights abuses and the dangers of populist leaders when assessing trade deals, money-laundering regulations, sanctions and access to the U.S. market and technology. While this shift in approach and tone will not immediately push international trade traffic into new patterns, it will lay the groundwork for a transition to more benign trade policies and less regulation for businesses working with preferred partners.  The foundations of global trade will shift just enough to push some companies, already weakened and weary by the pandemic recession, into a difficult scramble to quickly move operations and find new partners.


Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company which offers market entry research, political risk assessment, and international negotiations assistance.  Mr. Samson is a former U.S. diplomat and international law advisor.



Nearly Half of U.S. Voters Identified Trade as a Top Issue in Presidential Election

In a likely reflection of the front-and-center emphasis President Donald Trump has put on trade policy in his Administration, nearly half of U.S. voters identified trade as a top issue influencing their vote for president in 2020, according to TradeVistas’ latest survey.

Our poll also found that over the next four years, Americans want to prioritize policies supporting the U.S. production of goods and services, such as increasing U.S. exports abroad and promoting “Buy American” at home.

In our post-election survey of 1009 American adults, conducted by Lincoln Park Strategies, 22 percent of respondents said trade was “the most important issue to me” in determining their 2020 vote, while 27 percent said it was “one of the most important issues” to them. Of the rest, 32 percent said while trade was important, it didn’t affect their vote, and 20 percent said they were not sure or that it’s “not an issue I really care about.”

Importance of Trade in Vote for President

Over 60 Percent of Republicans Said Trade Was “Most” or “One of Most” Important Issues

Republicans were more likely to see trade as a top concern, with 61 percent saying it was the most important or one of the most important issues to their vote (versus 45 percent of Democrats. Independents, on the other hand, were the most likely to say it did not influence their vote (43 percent). Men were more likely to say trade was “the most important” issue to them (31 percent), while women were more likely to say a candidate’s position on trade did not affect their vote (39 percent).

Importance of Trade to Vote by Party

Trade as a Proxy for the General Economy

While the salience of trade as an election issue might seem surprising to some, there are a couple of potential explanations for our results. First, many voters may see trade policy as a proxy for their concern about the economy more generally. (In national exit polls, 37 percent of U.S. voters – including 83 percent of those voting for President Trump – said the economy was the issue that mattered most to their vote.) Moreover, Trump has made trade policy a centerpiece of his economic agenda, particularly with his trade war against China, the renegotiation of NAFTA as USMCA, and his promises to bring back jobs lost to offshoring. The President’s advocacy of policies like “Buy American” also explicitly linked the creation of U.S. jobs to U.S. production, which has arguably led to the conflation of trade and economic policy in the public mind.

Buy American to Remain a Top Priority

As our September survey found, Buy American enjoys immense bipartisan support, and respondents in our post-election poll indicated that this policy is their top priority among the options we tested. In our survey, 33 percent of respondents said policies like Buy American are “extremely important” to pursue over the next four years, compared to 26 percent who believed it extremely important to negotiate new trade agreements with other countries and 24 percent who said the same of increasing the export of U.S. goods and services. Consistent with our September survey, men and Republicans were somewhat more likely to consider Buy American to be “extremely important” (40 percent and 43 percent respectively). Overall, 61 percent of Americans said Buy American was “extremely important” or “very important,” while 59 percent said the same of new trade deals and more exports.

Tariff Fatigue Could Go Either Way

One policy that did not enjoy as strong support was the idea of imposing new tariffs. Just 20 percent said imposing new tariffs on foreign goods was “extremely important,” while an almost equal number – 19 percent – said new tariffs were not important (13 percent) or were opposed to the idea (6 percent).

On the other hand, low rates of opposition to new tariffs could indicate newfound acceptance of tariffs as a tool (or cudgel) in future trade policy.

Importance of Different Trade Policies

The Next Four Years

What all this means for the next four years is that Americans want to see and will support trade policies that aggressively promote American economic interests abroad and will create new jobs at home.

Methodology: Lincoln Park Strategies conducted 1009 interviews among adults age 18+ were from November 9-10, 2020 using an online survey. The results were weighted to ensure proportional responses. The Bayesian confidence interval for 1,000 interviews is 3.5, which is roughly equivalent to a margin of error of ±3.1 at the 95% confidence level.


Anne Kim

Anne Kim is a contributing editor to Washington Monthly and the author of Abandoned: America’s Lost Youth and the Crisis of Disconnection, forthcoming in 2020 from the New Press. Her writings on economic opportunity, social policy, and higher education have appeared in numerous national outlets, including the Washington Monthly, the Washington Post, Governing and, among others. She is a veteran of the think tanks the Progressive Policy Institute and Third Way as well as of Capitol Hill, where she worked for Rep. Jim Cooper (D-TN). Anne has a law degree from Duke University and a bachelor’s in journalism from the University of Missouri-Columbia.

made in china


In a survey back in May, more than 1,000 American adults, 40 percent said, “I will not purchase products made in China.” And for the first time since 2002, China is no longer consistently our top source of imports. Are we putting our money where our mouths are?

China purchase decision poll

Here’s a thought experiment.

Imports are approximately 15 percent of total U.S. consumption. China’s share of U.S. imports is about 21 percent, so our imports from China represent 3.15 percent of GDP. Forty percent of that is 1.26 percent. In a straight calculation, if 40 percent of our imports from China disappeared, then 1.26 percent of GDP would also disappear.

Of course, it’s not so straightforward. More realistically, those American consumers and producers who are trying to stop buying from China have some decisions to make. Do I buy imported items from another country or can they instead be made here at home, albeit likely at greater expense? Am I willing to pay more?

Willing to pay more question

Ripple Effect of U.S. Imports From China

There are also indirect effects. Data from the Organization for Economic Cooperation and Development show that 15.5 percent of our exports are produced or manufactured using foreign components. Of course some of that is from China and would have to be sourced differently, possibly at greater expense.

And in other potential knock-on effects, what if China, in turn, stopped buying from us overnight? China’s share of U.S. exports is 7.2 percent and the U.S. export share of GDP is 12.2 percent. Such a sea change could affect close to one percent of our GDP. American exporters would have to find buyers in other export markets (albeit potentially at a lower price because if buyers in other countries were willing to pay more than China, we’d be selling there already instead).

Labeling Q

So the question is, can we believe those 1,000 adults in the survey who say they won’t buy “Made in China”? There is a well-known response bias in surveys that occurs when survey respondents are emotive about the subject. In other words, people often say one thing but do another.

American views on China have been steadily declining for a few years and have further deteriorated with the backlash over the COVID-19 pandemic. But if history is our guide, we should not expect people to pay much extra to shun Chinese-made goods. Shoppers are price sensitive, especially lower-income consumers. And as we climb out of our pandemic-induced economic hole, Americans will be shopping for deals.



Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article originally appeared on Republished with permission.



President Trump has used Executive Orders to extend the reach of how “Buy American” legislation is implemented by federal agencies in their procurement evaluations. Presidential candidate Joe Biden has pledged to “use taxpayer dollars to buy American and spark American innovation”. Recent polling shows Americans believe Buy American policies support job creation.

While support for “Made in the USA” products appears politically trendy right now, the concept of maximizing taxpayer spend on goods and services with high U.S. content is far from new. In fact, it extends all the way back to our foundation. Recent polling shows Americans believe Buy American policies support job Here’s a primer on the evolution of Buy American policies.

1770s: Birth of America, Birth of Buy American

By the late 1760s, American colonists start a “non-consumption movement” against British goods in the attempt to force Britain to repeal its taxes. In Boston, merchants vote to block English trade, a move that culminates in the famous Boston Tea Party and the dumping of 45 tons of British tea into the harbor. The First Continental Congress of 1774 threatens a boycott of British goods. Patriotic colonists are expected to purchase goods made in America. Daughters of Liberty hold spinning and weaving parties to whip up American textiles. At his first inauguration, George Washington wears a brown suit of broadcloth from Hartford, Connecticut in a show of American-made symbolism.

1930s: The First Buy American Act

Newspaper magnate William Randolph Hearst decorates his mastheads with American flags to launch a popular Buy American campaign to bring the United States out of the Great Depression. Hearst’s own views and politics were tinged with racism. His anti-immigrant sentiment and reporting was likely a contributing factor to the Japanese-American internment that occurred during World War II.

On his last day in office, President Herbert Hoover signs the foundational Buy American Act of 1933. Above a certain dollar threshold, the federal government’s direct purchases must prefer domestic goods, defined as 100 percent manufactured in the United States with at least 50 percent domestic content. The requirement does not apply to third parties like private sector contractors who win funding through government procurement awards. The Act is promoted to safeguard American jobs for major infrastructure projects, including the Hoover Dam.

Historical Timeline of Buy American Legislation

1970s – 1980s: Manufacturing in Decline

The Buy America Act of 1982, a provision of The Surface Transportation Assistance Act, is introduced in reaction to capital flight in the 1970s and the beginning of steady decline in manufacturing employment. The requirements are extended to purchases made by third party agencies, as well as those made directly by the federal government. The act applies to the construction of highways, railways, and rapid transit systems.

The definition of “American-made” becomes more complex: all steel and iron components of end products must be mined, melted and manufactured in the United States, with an exception for “minimal use” if the materials constitute a low value or low percentage of the overall contract value.

1990s: Defense Purchases and the Berry Amendment

The Berry Amendment to the Fifth Supplemental Department of Defense Appropriations Act of 1941 gives preference in defense procurement to a range of products including clothing, food, and fabrics grown, produced or manufactured in the United States. It imposes stricter domestic content requirements on such purchases than the Buy American Act and is made permanent in 1994.

Trump's Buy American EOs

2000s: Trump Executive Orders

In the 2000s, the Obama administration approves Buy American requirements in the 2009 American Recovery and Reinvestment Act. All public projects backed by the Act’s funding were required to use domestically-produced iron, steel and manufactured goods unless the cost of doing so increased the overall project cost by 25 percent.

During his presidency, Trump has made extensive use of Executive Orders to shape federal agency implementation of Buy American requirements. He signs the Executive Order on Buy American and Hire American on April 18, 2017 “to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases.” The Order reaffirms that all aspects of steel and iron production must occur in the United States.

The Buy America Act does not apply to the acquisition of goods that are not commercially available in the United States in sufficient quality or quantity, or when it would be “inconsistent with the public interest.” Buy America preferences may also be waived if inconsistent with commitments made to U.S. trading partners under the WTO Government Procurement Agreement or U.S. free trade agreements.

Trump’s 2017 Executive Order directs federal agencies to scrutinize their compliance with Buy America requirements and to minimize their use of such waivers to purchase foreign goods and services. In addition, the Order mandates that, “to the extent permitted by law, before granting a public interest waiver, the relevant agency shall take appropriate account of whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods.”

Foreign End Products in Fed Procurement

Trump signs an Executive Order on Strengthening Buy-American Preferences for Infrastructure Projects on January 31, 2019. The Order extends the previous order, targeting infrastructure projects that receive federal financial assistance awards, greatly widening the scope of affected programs and projects.

On July 15, 2019, Trump signs an Executive Order on Maximizing Use of American-Made Goods, Products, and MaterialsThe Order reinterprets the so-called “component test” to increase the thresholds for U.S.-origin components. Iron and steel end products must contain 95 percent or greater U.S. origin “parts or materials”. Other products must contain 55 percent or more U.S. parts or materials.

Most recently, President Trump issued an Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States on August 6, 2020 in response to the COVID-19 pandemic. With the goal of reducing dependence on foreign supply chains and strengthening domestic ones, the order declares U.S. policy to accelerate domestic production of essential medicines; ensure long-term demand for the medicines produced; create and maximize domestic production for Critical Inputs and Finished Drug Products; and combat the trafficking of such medical equipment and products.

Criticism of Buy America Requirements

A 2018 study by the Government Accounting Office (GAO) found that of the $196 billion in federal obligations in fiscal year 2017 to purchase end products, just $7.8 billion or 4 percent were foreign end products purchased using exceptions to Buy America requirements. 47.1 percent of that amount went to end products used outside the United States and just 7 percent of the amount was purchased using waivers associated with free trade agreement obligations.

Beyond the waivers for purchasing foreign goods, critics argue that instead of being a boon to U.S. contractors, domestic content requirements create additional and costly regulatory burdens for U.S. companies competing for federal contracts. Buy America requirements may reduce procurement choices for federal agencies like the Department of Defense while potentially increasing costs to U.S. taxpayers. The jobs argument behind Buy America has also been scrutinized. In one economic analysis by trade economist Tori Smith, Smith argues that the steel purchasing requirements in Buy American legislation have done little to stem employment losses in the U.S. steel industry, in steady decline since 1980.

Neither is the United States out of line when it comes to imports as a percentage of overall public procurement. The average is 4.4 percent, which is the U.S. rate of purchases. Put in further context, imports as a percentage of U.S. GDP is generally lower than its peers in the OECD, at just 17 percent. The United States may have more to lose economically by reducing opportunities for foreign suppliers in the U.S. procurement market. In 2018, the global procurement market was worth an estimated $11 trillion. In a boomerang effect, U.S. companies could lose the ability to bid on foreign government projects if other countries expand their own Buy European or Buy China requirements.

Imports as Share of Procurement

Where Trump and Biden Meet

Presidential candidate Joe Biden has put forward his own version of Buy American as part of his platform to “ensure the future is made in all of America by all of America’s workers.” Biden promises to use taxpayer dollars to buy American and spark American innovation.

In the debate over which candidate can out-“buy-American” the other, only one thing is clear: the United States is not the only country looking for ways to help its domestic economy recover from COVID-19. But buyer beware: domestic purchase requirements can have adverse effects on the companies they are intended to help while putting additional strain on federal agency budgets. The more countries that impose them, the greater the chance that gains from global government procurement trade policies will be reduced.


Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

buy american


TradeVistas’ September poll shows overwhelming support for “Buy American” policies, while one in four Americans – and nearly 1 in 3 Republicans – say trade is “the most important issue” in their vote for president this election cycle.

“Buy American” is likely to be a prominent campaign theme this fall as Republican President Donald Trump and Democrat party candidate Joe Biden sketch out their plans for reviving the U.S. economy in the midst of a pandemic.

Biden’s aggressive “Buy American” agenda proposes major investments in federal procurement and infrastructure to support domestic manufacturing. Trump, meanwhile, has made “Buy American” a cornerstone of his Administration. After campaigning in 2016 to bring back U.S. jobs lost to global competition, Trump has levied tariffs on foreign steel and aluminum, launched a trade war against China and issued executive orders aimed at ensuring that U.S. companies were the federal government’s preferred suppliers.

TradeVistas’ September poll of 1,003 adults, conducted by Lincoln Park Strategies, shows strong support for “America First” approaches like Buy American. Our survey shows strong bipartisan approval of Buy American federal procurement policies, which a plurality of Americans say would create large numbers of jobs. Americans also say they support Buy American in their personal spending, with a slight majority saying they’d pay a premium for U.S.-made goods. Finally, we find that the Trump’s Administration’s focus on trade policy may have elevated the importance of this issue among many voters, particularly among Republicans and likely Trump voters.

1. Big support for “Buy American.”

Overall, three out of four Americans (75 percent) say they support Buy American policies requiring the federal government to buy from domestic suppliers whenever possible.* Nearly half – 48 percent – say they “strongly support” the policy, while just 5 percent of Americans say they are either “somewhat” or “strongly” opposed, while 21 percent were “indifferent.”

Majority support was consistent across education, race and income, but was strongest among self-described Republicans, 70 percent of whom “strongly support” the policy (compared to 40 percent of Democrats and 37 percent of Independents). Among likely voters, 68 percent of those planning to vote for Trump also said they “strongly support” Buy American, compared to 41 percent among likely Biden voters and 39 percent among those who were undecided. Men were also more likely to be strong supporters (56 percent versus 41 percent).

Q1 Do you support Buy American Policies

2. Strong belief that “Buy American” policies generate jobs

While some prominent economists have criticized Buy American policies as counterproductive and potentially even leading to the loss of U.S. jobs, respondents in our survey believe the opposite. Nearly 4 in 5 respondents (79 percent) say Buy American procurement policies would create jobs, including 41 percent who say it would create “a large number of jobs” and 38 percent who say it would create “some new jobs.” Again, this support was consistent across race, education and income.

Democrats were more skeptical than Republicans, however. While 60 percent of Republicans said Buy American would create many jobs, 36 percent of Democrats said the same. (However, only 2 percent of Democrats said the policy would “hurt American jobs.”) Similarly, likely Trump voters were more likely to say Buy American would create large numbers of jobs compared to likely Biden voters (59 percent versus 31 percent). Undecideds fell in the middle with 42 percent.

Q2 Do Buy American policies create jobs numbers corrected

3. Americans would pay more to Buy American themselves

Americans in our survey seem to support Buy American as a broad statement of economic patriotism and would pay more to buy U.S.-made goods.

Twenty-five percent of respondents in our survey said they would choose an American-made good over a comparable foreign product “regardless of cost,” while 31 percent say they would pay a 10 to 20 percent premium. Another 25 percent said they would buy the U.S. product if it were the same price as a comparable item, while 9 percent said they would purchase the cheaper product, and 10 percent were unsure.

Q3 Would you pay more to Buy American

These results run counter to earlier surveys finding that while the majority of Americans believe it important to buy U.S. products, they are less willing to pony up a premium. A 2017 Reuters/Ipsos poll, for instance, found that while 70 percent of Americans think if “very important” or “somewhat important” to buy U.S. goods, 37 percent said they would not pay more for an American product, while 26 percent said they would pay only up to 5 percent more.

One potential explanation for our results is negative shifting consumer sentiment toward products made in China. A 2020 survey by FTI Consulting, for instance, found that 40 percent of Americans say they won’t buy Chinese-made goods.

Our survey found significant partisan differences over buying American, which indicate a solidification of views likely prompted by Trump. While 46 percent of Republicans said they would buy American regardless of price, just 18 percent of Democrats said the same (although 32 percent of Democrats also said they would be willing to pay a 10 to 20 percent premium). The starkest difference, however, was between Republican men and Democratic women. While 52 percent of Republican men said they would buy American regardless of cost, only 14 percent of Democratic women said they would do so.

Q3 Would you pay more by gender and party

4. Trade as a crucial election issue for key sets of voters

Partisan enthusiasm for Buy American may also translate into the elevation of trade as an election issue for many of the respondents in our survey. Overall, 19 percent of total respondents said a candidate’s position on trade is “the most important issue to me,” while 25 percent said trade is “one of the most important issues” determining their vote for president.

These figures, however, mask significant partisan differences in how likely voters view the importance of trade. For instance, while 66 percent of Republicans in our survey said trade was the most important or among the most important issues to them in their vote for president, half as many Democrats (33 percent) felt the same. Similarly, while 64 percent of likely Trump voters said trade was the most important issue or among the most important election issues to them, 62 percent of likely Biden voters said trade “is important but will not have an effect on my vote” or is “not an issue I really care about.” Trade does, however, seem to matter for undecided voters in our poll; 59 percent considered the issue to be the most important or among the most important in their vote for president.

These results mirror findings showing sharp partisan differences in the issues that matter most to voters this fall. The Pew Research Center, for instance, finds that while the economy is the top concern of Trump voters, Biden supporters are the most concerned about health care and the pandemic. For many Republicans and Trump supporters, the interest in trade policy is likely a proxy for this broader concern over the economy.

Q4 How Important is Trade to your vote

“Buy American” has always made for good politics, tapping into Americans’ strong sense of economic patriotism. But there are a couple reasons why American sentiment toward buying American might be especially strong today, even aside from the particular focus on U.S. production by President Trump.

For one thing, the coronavirus pandemic exposed major weaknesses in global supply chains, reinforcing concerns about U.S. over-reliance on foreign imports, particularly for medicines, medical equipment and other vital products. Boosting domestic production and manufacturing will also be crucial to America’s post-pandemic recovery. So long as millions of Americans remain under-employed or unemployed as a result of COVID-19, federal investment in domestic production or infrastructure could help put Americans back to work.

Given both political parties’ embrace of Buy American, it will be a priority regardless of who wins the White House in November.

*Note: While our survey sought to measure Americans’ perspectives on “Buy American” as a matter of federal policy, we realize that Americans are likely to interpret “Buy American” more broadly, to include personal spending decisions as well as those by the government. Politicians have also added to the confusion by using the phrase “Buy American” to show support for domestic manufacturing and production generally.

Methodology: 1,003 interviews among adults age 18+ were conducted by Lincoln Park Strategies from September 10-12, 2020 using an online survey. The results were weighted to ensure proportional responses. The Bayesian confidence interval for 1,000 interviews is 3.5, which is roughly equivalent to a margin of error of ±3.1 at the 95% confidence level.

Access the polling questions and results by Lincoln Park Strategies here.

Download the full infographic.

TradeVistas Buy American Opinion Poll Infographic


Anne Kim

Anne Kim is a contributing editor to Washington Monthly and the author of Abandoned: America’s Lost Youth and the Crisis of Disconnection, forthcoming in 2020 from the New Press. Her writings on economic opportunity, social policy, and higher education have appeared in numerous national outlets, including the Washington Monthly, the Washington Post, Governing and, among others. She is a veteran of the think tanks the Progressive Policy Institute and Third Way as well as of Capitol Hill, where she worked for Rep. Jim Cooper (D-TN). Anne has a law degree from Duke University and a bachelor’s in journalism from the University of Missouri-Columbia.