The Telling Absence of “Buy American” Mandates

Scott Lincicome

In announcing his $2 trillion infrastructure* plan yesterday, President Joe Biden promised that it would feature a hefty dose of Buy American protectionism:

When we make all of these investments we’re going to make sure, as the Executive Order I signed early on, that we buy American. That means investing in an American based companies and American workers. Not a contract will go out that I control that will not go to a company that is an American company with American products all the way down the line, and American workers. And we’ll buy the goods we need from all of America.

Cato scholars have spent decades explaining Buy American restrictions’ many theoretical and practical shortcomings, but perhaps the best Buy American lesson came only a few hours after Biden’s speech, when news broke that millions of Johnson & Johnson vaccine doses had been spoiled at the company’s Baltimore facility. Buried in the New York Times story on the J&J setback was this reassurance (emphasis mine):

The error does not affect any Johnson & Johnson doses that are currently being delivered and used nationwide, including the shipments that states are counting on next week. All those doses were produced in the Netherlands, where operations have been fully approved by federal regulators.

What a relief!

More seriously, the Dutch J&J doses (and the company’s global vaccine operations) again reveal the telling lack of Buy American or other nationalist restrictions on U.S. government purchases of COVID-19 vaccines. As I noted a few weeks ago:

[T]he Trump administration’s contract with Pfizer expressly excluded from government reach R&D, clinical trials, and manufacturing supply chain issues (i.e., “activities that Pfizer and BioNTech have been performing and will continue to perform without use of Government funding”). Thus, even the uber‐​nationalist Trump White House realized that government attempts to “nationalize” and micromanage the vaccine’s development and delivery would have delayed—if not thwarted—those processes, costing numerous American lives along the way.

When time was of the essence and success really, really mattered, they just got out of the way. And it worked.

Buy American restrictions undoubtedly raise costs and jeopardize federal projects’ timely completion; hence, why they’re (thankfully) absent from the U.S. government’s vaccine contracts. Instead, the United States’ COVID-19 vaccine rollout has leveraged multinational pharmaceutical producers’ global capital, talent and supply chains (including manufacturing facilities here and abroad) — to pretty great effect.

If, as the White House keeps telling us, the Biden infrastructure* plan really does target similarly urgent — perhaps even existential — global priorities like climate change and China, one must ask why the president insists on impeding such efforts (and potentially alienating allies) with onerous new Buy American mandates. 

Or maybe these threats aren’t as urgent or existential as claimed?

*Only a fraction of the bill actually targets infrastructure.