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THE U.S., CHINA, AND THE FUTURE OF THE WORLD TRADING SYSTEM

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THE U.S., CHINA, AND THE FUTURE OF THE WORLD TRADING SYSTEM

Victorious after World War II and the Cold War, the United States and its allies largely wrote the rules for international trade and investment. Critically, the United States and European Union drove the creation of the World Trade Organization (WTO) in 1995 with the aim of opening trade in goods and services for their products, ramping up protection for their intellectual property, and transforming national trade-related law and institutions within countries around the world to look more like American and European law and institutions. Developing countries joined the WTO, but often complained that its rules were skewed. As a result, it was argued, the U.S. and European Union could rule the global economy through rules. They were incredibly successful, as WTO norms transformed laws and institutions within emerging economies.

Yet by 2020, 25 years after the WTO’s creation, it was the U.S. that has become the great disrupter—disenchanted with the rules’ constraints, including on its ability to create new rules. It was the U.S. that flouted WTO rules in the name of “national security” and the national interest—even to protect American producers of aluminum siding, and to pressure countries to block migration from Mexico and Central America. It was the U.S. that neutered trade dispute settlement and threatened to withdraw from the organization. Meanwhile, the United Kingdom— the EU’s second largest economy—voted by referendum to leave the European Union. As nationalist parties rose in prominence throughout Europe, the EU was pressed to turn inward to protect its very existence, curtailing its role on the global stage. It continues to defend multilateralism, but it is in a much weaker position following the euro crisis, internal divisions over migration, Brexit and the ravages of the COVID-19 virus, than it was in the 1990s. 

Paradoxically, China and other emerging economies became stakeholders and (at times) defenders of economic globalization and the rules regulating it, even while they too have taken nationalist turns. Before the World Economic Forum in Davos, that paragon of global institutions, China’s President Xi declared in his 2016 keynote address, “We must remain committed to developing global free trade and investment, promote trade and investment liberalization and facilitation through opening up and say no to protectionism.” 

How did this come to be? How did the emerging powers invest in trade law to defend their interests? What has this meant for their own internal economic governance? And what does it mean for the future of the trade legal order in light of intensified rivalry between the U.S. and China, triggering a new economic cold war? 

Many economists write of China’s rise in terms of efficiency—a combination of Western know-how and Chinese wages that triggered a “manufacturing miracle” where China became producer for the world. In his book The Great Convergence, Richard Baldwin explains how the revolution in information and communications technology in the 1990s led Western firms to outsource production of goods and services to countries such as China and India, creating a new unbundling of production through global supply chains. This unbundling “created a new style of industrial competitiveness—one that combined G7 know-how with developing-nation labor.” China became the manufacturer for the world. Its share of world manufacturing surged from 3% percent in 1990 to 19% in 2015. Western firms outsourced services to India, whose services exports increased more than 22-fold from US$8.9 billion in 1997 to US$204 billion in 2018, while its manufacturing grew in parallel. Such growth triggered a commodity boom for Brazil’s highly competitive agribusiness and mining sectors. 

These economic shifts catalyzed dramatic changes in shares of global gross domestic product. In just 29 years, the share of the G7 (U.S., Japan, Germany, U.K., France, Canada and Italy) plummeted 18 percentage points, from 64% (in 1990) to 46% (in 2019) in nominal terms, and to 30% measured by purchasing power parity. In contrast, China’s and India’s share soared. At the start of 2020, the share of global GDP of China, India and Brazil approached that of the U.S. in nominal terms (21% compared to 24%) and almost doubled it in terms of purchasing power (29% to 15%). Within a decade, China should become—once more—the world’s largest economy.

These changes in the share of global GDP gave rise to shifts in power, as political scientists stress. While the U.S. and Europe turned inwards, emerging powers like China gained confidence and became central players in the global economy. The creation of the G20 for global economic governance first reflected this transition. 

The growing U.S-China rivalry now dramatizes it. China, India and Brazil each play a leadership role in regional economic governance, and they aim to play a growing role globally. Although the U.S. wishes to halt China’s rise, the reality is that two-thirds of countries trade more goods with China than the U.S., compared to just one-fifth in 2001, the year China joined the WTO. Simply put, the economies and market size of China and other emerging powers matter, providing the country with negotiating leverage, constituting a form of power. 

So, what about law? Stated simply, it is not just structural and material power that govern the world, but also law, legal institutions and their practices. They are complementary, and they affect each other. Law and legal institutions provide normative resources that actors harness to advance their interests. They simultaneously affect the normative environment in which actors operate, which shapes their understanding and pursuit of interests. The story of emerging powers’ rise and the implications for global trade governance requires a complementary story about law and their deployment of it. My book, Emerging Powers and the World Trading System, provides that story. It tells the past story of trade law’s impact within large, emerging powers and their response to trade law, which, in turn, helps us understand the current context and responses to this context that will shape international trade and economic law’s future. The book shows how emerging powers changed internally to engage better externally.

These countries’ institutional changes and investments in legal capacity shaped the international trade legal order. They learned how to play the legal game to thwart U.S. and European dominance of the trade regime, both in negotiations and in litigation over the meaning of legal texts. This dynamic, in turn, constrained U.S. and E.U.EU policymaking, ranging from agricultural subsidies to industrial protection through import relief law. When the U.S. and European Union turned away from the WTO to create new rules through bilateral and regional trade and investment agreements, China and other emerging powers developed their own initiatives and models as well. 

The challenges for the future of the multilateral legal order for trade are clearly material, structural and ideological, as well as legal. On the one hand, they reflect the growing economic power of China, and the impact of trade from China and other emerging economies within the United States. On the other hand, traditional narratives of the benefits of free trade that ignore the impact on the economically vulnerable, have been destabilized, especially in the United States. 

The development of legal capacity to use, make, shape and apply law are is a critical part of this story, and they will continue to shape the evolving ecology of the trading system. By defining the trade order in terms of rules and judicialized dispute settlement, the WTO system created an opening for emerging economies to invest in trade law capacity and take on the U.S. and Europe at their own legal game. As a system of law purportedly in service of fairness and equal treatment, weaker players could also win. Law’s ideology of rationality and fairness could constrain the powerful, shape the interpretation of norms, and affect their strategies. The legal order for trade, although slanted in favor of the powerful, offered opportunities to weaker parties who could compete through building legal capacity. China’s, Brazil’s and India’s investments in legal capacity help explain the paradox of the U.S. abandoning the legal order that it created.

The U.S. challenge to the legitimacy and efficacy of the international trade regime that it created, and emerging powers’ defense of that regime, is a paradox that cuts across international relations theories.

John Ikenberry, in his book After Victory, published a decade after the end of the Cold War and five years after the WTO’s creation, asked this central political question: “What do states that have just won major wars do with their newly acquired powers.” His answer was a legal one: They create the rules of the game. In this situation, he wrote, states “have sought to hold onto that power and make it last” through institutionalizing it. He called the order that the U.S. created a “liberal hegemonic order” because other states consented to it in the context of American unipolar power, while the U.S. agreed to constrain itself under the rules to “make it acceptable.”

Michael Zurn, in his theory of global governance, argues that such regimes create resistance because they are “embedded in a normative and institutional structure that contains hierarchies and power inequalities.” He thus contends that “counter-institutionalization is the preferred strategy by rising powers.”

And the realist Graham Allison, in his book Destined for War, writes, “Americans urge other powers to accept a ‘rule-based international order.’ But through Chinese eyes, this appears to be an order in which Americans make the rules, and others obey the orders.” The paradox with the trade legal order is that China and other emerging powers became its defenders, while the U.S., under the Trump administration, attacked it as illegitimate and neutered its dispute settlement system. The U.S. became the revisionist power. So far, the Biden administration has continued these policies, although with a more constrained rhetoric and without the 3 a.m. tweets.

Political fault lines over trade are not just between states, but also within them. Such politics shape legal ordering internationally. Developments in China implicate companies and workers in the U.S.; the rise of U.S. economic nationalism implicates companies and workers in China. International law and institutions such as the WTO can provide an interface that helps to shape those interactions, but international law and institutions are also reciprocally shaped by them. International law and institutions are both medium and outcome.

For trade liberals, this has the arc of a tragedy. International trade law rose in prominence and trade law norms permeated deeply within emerging powers’ laws, institutions and professions. Yet, the very success of such legal ordering triggered unintended consequences. As these countries rose in economic importance and built legal capacity to wield WTO law to defend and advance their positions, the U.S. became disenchanted with the legal order it had created. It elected an economic nationalist who became “a wrecking ball,” unsettling the international legal order for trade and broader economic governance.

Effective international legal orders must be grounded in common perceptions of problems that law can address. If perceptions of underlying problems shift in radically divergent ways within the U.S., E.U.EU and these emerging powers, then the WTO as a multilateral institution based on common rules that permeate domestic laws and institutions becomes unsettled. There is no end of history, no unidirectional force toward a particular manifestation, breadth or depth of international legal ordering. Norms settle and unsettle, internationally and domestically, often in parallel. Now the centralized WTO legal order for trade is declining, giving rise to fragmenting, overlapping and competing regional and bilateral legal ordering.

The challenge for states will be how to maintain and adapt the international trade legal order to changing political and economic contexts. To maintain the international trading system to foster economic order, sustainable and inclusive growth, and the pacific settlement of disputes through law, the U.S., E.U.EU, China, India and Brazil will need to collaborate to define rules governing the interface of their economies. International trade law and institutions are no nirvana, but the alternative to them could be dire. We are in the history and make the history with the choices we make today. 

The Trump administration may have neutered the WTO’s dispute settlement system and brazenly ignored WTO rules. So far, the Biden administration has done little to nothing to change this. Its legacy for the multilateral trading system will depend on the decisions it makes in the months to come.

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Gregory Shaffer is Chancellor’s Professor at the University of California, Irvine School of Law and President-Elect of the American Society of International Law. This essay is taken from his book Emerging Powers and the World Trading System (2021, Cambridge University Press).

wind energy production

U.S. States Producing the Most Wind Energy

“Meteoric” is one way to describe wind energy’s rise to the top of America’s renewable energy industry.

Amid repeated calls from scientists and activists to undertake measures to curb global warming, lawmakers, politicians, and the energy industry have responded. Foremost in that effort is the call for carbon-free energy production via alternative energy sources like wind and solar. Many states have followed suit, with governors from coast to coast implementing wide-ranging initiatives meant to gradually reduce the carbon footprint of power generation in the coming years.

Wind generation is at the leading edge of the movement toward clean energy production. Fields of wind turbines across the country have slowly started to increase their proportion of total energy production. And just this year, President Joe Biden announced measures meant to accelerate the development of offshore wind energy.

While U.S. offshore wind production currently lags behind that of other developed nations, its onshore capacity is second only to China. Wind energy’s share of total utility-scale electricity generation in the U.S. grew from less than 1% in 1990 to about 8% last year.

In 2019, more than $13 billion was invested in wind power, and the amount of new generation capacity added to the nation’s electrical grids through wind projects was greater than all other sources except natural gas. Driving the investment may be the simple fact that it’s far cheaper to install wind farms than it is to build hydroelectric plants and solar farms. Alongside the value, the federal government subsidized wind construction with tax credits. The result? Wind generation exceeded hydroelectric power for the first time in 2019.

While tax credits and reasonable construction costs have increased wind’s popularity, perhaps its greatest advantage is availability. Wind regularly barrels across the Midwest and the Texas-Oklahoma border at average speeds of 20 to 30 miles per hour, a key speed range, as turbines reach their rated generation capacity when winds hit 26 to 30 miles per hour.

This explains why the Midwest and the West South Central region are home to the top wind-generated electricity producers in the nation. Texas leads the nation in total wind energy production, generating more than twice as much wind electricity as the next state. And while the Lone Star State’s wind energy makes up a significant portion of its renewable energy generation (92%), Kansas’ renewable energy generation relies on wind more than any other state. Kansas’ wind turbines produce more than 99% of its renewable energy and 42% of total.

The data used in this analysis is from the U.S. Energy Information Administration. To determine the states producing the most wind energy, researchers at Commodity.com calculated each state’s annual wind energy production, measured in megawatt-hours. Researchers also calculated the absolute change in wind energy production since 2010, wind’s share of total energy production, and wind’s share of total renewable energy production.

Here are the states producing the most wind energy.

State Rank Annual wind energy production (MWh) Change in wind energy production since 2010 (MWh) Wind share of total energy production Wind share of total renewable energy production

 

Texas     1     83,620,371 57,368,961 17.3% 92.0%
Oklahoma     2     29,008,131 25,200,048 34.0% 87.2%
Iowa     3     26,304,990 17,134,653 42.0% 96.2%
Kansas     4     21,123,539 17,718,474 41.5% 99.6%
Illinois     5     14,459,597 10,005,963 7.8% 96.0%
California     6     13,735,069 7,656,437 6.8% 14.1%
North Dakota     7     11,213,025 7,117,384 27.3% 77.9%
Minnesota     8     10,964,869     6,173,146 18.5% 75.8%
Colorado     9     10,852,376     7,400,525 19.3% 77.3%
Nebraska     10     7,211,092     6,789,447 19.3% 83.2%
New Mexico     11     6,892,087     5,059,905 19.6% 81.1%
Washington     12     6,677,261     1,932,582 6.3% 9.0%
Oregon     13     6,568,889     2,648,882 10.6% 17.0%
Indiana     14     6,216,030     3,281,987 6.1% 85.7%
Michigan     15     5,825,705     5,465,365 5.0% 58.7%
United States     –     295,882,483     201,230,237 7.2% 40.6%

 

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website: https://commodity.com/blog/states-wind-energy/

voters

NEW POLL: TRADE WAS A TOP ISSUE FOR MANY 2020 VOTERS

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.

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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 Atlantic.com, 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.

american

EVOLUTION OF BUY AMERICAN POLICIES

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 creation.ing. 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.

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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

AMERICANS LOVE TO “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

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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 Atlantic.com, 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.