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
-
Rational Security: The “Adverse Possession” Edition
Podcast
This week, Scott sat down with Lawfare Managing Editor Tyler McBrien and Contributing Editor and CNAS adjunct senior fellow Alex Zerden to talk through a few of the week’s big...
By Alex Zerden
-
What if 'America First' Appears to Work? With Tom Wright
Podcast
Tom Wright joins to talk about his recent article, “What if 'America First' Appears to Work?" about the Trump administration’s “might makes right” approach to foreign policy, ...
By Emily Kilcrease & Geoffrey Gertz
-
Economic Security in North America
Reports
Executive Summary The United States, Mexico, and Canada Agreement (USMCA) negotiated during President Donald Trump’s first term includes a novel review clause. By July 2026, t...
By Emily Kilcrease & Geoffrey Gertz
-
Hearing on the Operation of the Agreement between the United States of America, the United Mexican States, and Canada
Congressional Testimony
Thank you for the opportunity to provide testimony today. My remarks will focus on the role that the U.S.-Mexico-Canada Agreement (USMCA) plays in advancing America’s strategi...
By Emily Kilcrease
