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.

  • Commentary
    • Lawfare
    • December 13, 2024
    Our Man in Damascus? Sanctions and Governance in Post-Assad Syria

    The complexity of the legal and policy issues presented by the sanctions thicket surrounding Syria—and the disparate authorities responsible for various parts of it—will requi...

    By Alex Zerden

  • Video
    • December 13, 2024
    Ziemba: Russia & Iran Concentrating on Own Battles

    The rebel-led alliance in Syria is set to form a transitional government, after overthrowing President Bashar Al Assad. Reports say the reason the Assad regime fell so quickly...

    By Rachel Ziemba

  • Commentary
    • December 12, 2024
    Sharper: Tariffs

    The incoming Trump administration has signaled that tariffs will be a central pillar of its economic strategy, with significant implications for international trade, the Ameri...

    By Eleanor Hume, Charles Horn & Gwendolyn Nowaczyk

  • Podcast
    • December 12, 2024
    Taking Trump’s Tariffs Threats Seriously

    Join Emily and Geoff to catch up on a whole bunch of economic security news, including the ill fated Nippon Steel / U.S. Steel deal, new chips export controls, and TikTik’s ba...

    By Emily Kilcrease & Geoffrey Gertz

View All Reports View All Articles & Multimedia