NCPA - National Center for Policy Analysis

IMPOSITION OF "BUY AMERICAN" PROVISIONS OF THE RECOVERY ACT

September 18, 2009

The enthusiasm to create new U.S. jobs and to spend the stimulus money from the Recovery Act of 2009 as quickly as possible will lead to a reduction in the country's attention to international agreement obligations. This will expose the United States to the risk of retaliation, says the U.S. Chamber of Commerce. 

Congress passed, and the President signed into law, the American Recovery and Reinvestment Act of 2009 (the "Recovery Act") in February 2009.  It provides tax relief and government funds for a wide variety of spending initiatives, totaling $787 billion.  It includes the following requirements:

  • All iron, steel and manufactured products used in Recovery Act-funded public building and works projects must be produced in the United States.
  • Clothing, equipment and textile products purchased by the Department of Homeland Security with Recovery Act funds must be made in the United States.

More immediately, moves by U.S. trading partners to employ their own "buy national" or "buy local" requirements to their stimulus spending initiatives have been reported, says the Chamber. 

A loss of 1 percent of potential foreign stimulus procurement opportunities could lead to a total of 176,800 net employment losses to the United States, notes the Chamber.                          

Source: Source: Laura M. Baughman and Joseph F. Francois, "Imposition of "Buy American" Provisions of the Recovery Act," U.S. Chamber of Commerce, September 15, 2009.

 

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