November 02, 2021
The 'Make in America to Sell in America Act' undermines US competitiveness
Sen. Josh Hawley (R-Mo.) has introduced new legislation that seeks to ease the current supply chain crisis and support domestic manufacturing — popular themes in Washington these days. The core of the legislation is a requirement that designated goods sold in the United States have the majority of their components sourced from the United States. In trade policy lingo, this is referred to as a local content requirement.
While Hawley’s proposal may have appeal in the current political climate, it undercuts decades of U.S. work to fight the local content policies of other countries that harm U.S. global competitiveness.
When foreign governments impose local content requirements, it hurts the ability of U.S. companies to compete in those markets.
Simply put, when foreign governments impose local content requirements, it hurts the ability of U.S. companies to compete in those markets. Local content requirements can force U.S. companies to use substandard inputs, rather than the inputs that meet the quality and price requirements that work best for their business. It also hurts the ability of U.S. firms to export inputs into foreign markets, hamstringing their global growth potential.
For example, a U.S. auto manufacturer exporting to Japan wants to have the freedom to choose where its aluminum frame comes from. It is a much better outcome for both the U.S. auto industry and the U.S. aluminum industry if U.S. car companies can use U.S. aluminum rather than being forced to use Japanese aluminum in order to be able to sell cars in the Japanese market.
Read the full article from The Hill.
More from CNAS
-
The Real Impact of SCOTUS's Tariff Hearing with Kathleen Claussen
Podcast
Kathleen Claussen, Professor of Law at Georgetown University, joins Emily and Geoff to discuss the SCOTUS case on Trump's tariffs. They share their insights from the recent SC...
By Emily Kilcrease & Geoffrey Gertz
-
The Future of IEEPA Tariffs with Geoffrey Gertz
Podcast
On November 5, the Supreme Court of the United States heard oral argument on the use of the International Emergency Economic Powers Act (IEEPA) by President Donald Trump to im...
By Geoffrey Gertz
-
Economic Security in North America
Commentary
Executive Summary In its request for comment, the Office of the U.S. Trade Representative (USTR) solicits comments on and recommendations for “specific actions [to promote] al...
By Emily Kilcrease & Geoffrey Gertz
-
How Sanctions Became a Way to Wage War and When They Actually Work, with Eddie Fishman
Podcast
In this episode of “Financial Crime Matters,“ Kieran Beer talks with Eddie Fishman, CNAS adjunct senior fellow and author of “Chokepoints: How the Global Economy Became a Weap...
By Edward Fishman
