Please ensure Javascript is enabled for purposes of website accessibility
Opinion: Why Aren’t Federal Agencies Helping to Build Back Better?
Inside-Sources
By InsideSources.com
Published 2 years ago on
October 10, 2021

Share

Polls continually show that U.S. consumers want to buy American-made products. In particular, Americans don’t want to buy from China, and they understand that buying “Made in USA” can support good jobs and economic growth at home.

Unfortunately, federal government programs often incentivize foreign manufacturing. That’s because the United States stands alone among the world’s major industrial nations in lacking a coordinated strategy to grow domestic manufacturing. In fact, the stated goals of many important federal agencies actually serve as a barrier to developing new supply chains in the U.S.

The U.S.’ Lack of Concern for Domestic Manufacturing

Michael Stumo

Opinion

This lack of concern for domestic manufacturing is exemplified by the National Economic Council (NEC), the key White House body tasked with coordinating economic policy. Despite frequent presidential rhetoric—such as President Joe Biden’s ‘Build Back Better’ agenda and former President Donald Trump’s pledges to “Buy American” and hire American—the NEC still lacks any mandate to rebuild supply chains at home.

A look at various federal agencies reveals few goals to reshore important production. For example, the Department of Energy’s (DOE) Loan Program Office provides billions of dollars in loans for power generation projects throughout the nation. However, the DOE doesn’t specify where the resulting power grid infrastructure should be manufactured.

Similarly, the Commerce Department’s Economic Development Administration (EDA) focuses on “innovation, emerging technologies, intellectual property—and data.” This betrays a glaring lack of concern for the production side of digital technologies. The EDA simply aims to “Strengthen IP protection” and “Advance Innovation.” However, R&D that the agency funds often ends up being manufactured overseas.

There’s also the recent CHIPS for America Act, which aims to stimulate domestic research and development for semiconductors. Unfortunately, the legislation fails to sufficiently require chipmakers to locate new production in the U.S. And that perpetuates America’s longstanding pattern of inventing groundbreaking technologies—like solar panels and computer chips—and then manufacturing them overseas.

More Money Needs to be Spent on American-Made Products

The federal government spends roughly $600 billion annually on procurement. Spending that taxpayer money specifically on American-made products rather than imports could provide a huge boost for domestic companies. But too often, federal agencies simply purchase the cheapest possible goods, regardless of where they’re made.

Most industrialized nations take a different approach. They use government procurement to support their own factories. And they wisely try to sell their goods in the U.S. but avoid buying American-made products in return. For example, India maintains a 125 percent tariff on imports of cars and trucks—a policy it has used to build the world’s fourth-largest auto market. Virtually every car on India’s roads is made in India. In contrast, the United States imposes a mere 2.5 percent tariff on car imports. This allows multinational companies to build new auto plants in low-wage countries like Mexico and then sell cars very profitably to U.S. consumers.

Essentially, when policymakers talk about “boosting exports,” they’re missing the big picture. In order to rebuild domestic manufacturing, Washington must finally prioritize America’s home market—and help domestic manufacturers sell more products to U.S. consumers.

Spending taxpayer money specifically on American-made products rather than imports could provide a huge boost for domestic companies. But too often, federal agencies simply purchase the cheapest possible goods, regardless of where they’re made. (Shutterstock)

Rebuilding the U.S. Industry Needs Leadership From Washington

An analysis by the Coalition for a Prosperous America (CPA) found that the domestic U.S. market for manufactured goods totaled $6.8 trillion in 2020. By comparison, exports totaled only $1.2 trillion in 2020. Exports simply pale in comparison to what U.S. manufacturers could gain from reclaiming more of their home market.

Since 2002, America’s factories have lost 7.7 percent of their home market. Regaining that slice of the pie could add roughly $500 billion to U.S. manufacturing revenue and create millions of new jobs.

Unfortunately, U.S. manufacturers keep losing ground at home. Since 2002, America’s factories have lost 7.7 percent of their home market. Regaining that slice of the pie could add roughly $500 billion to U.S. manufacturing revenue and create millions of new jobs.

Fixing this will require a concerted, whole-of-government strategy. That means Washington doubling down on domestic procurement and insisting that federal agencies purchase goods from U.S. suppliers whenever possible.

Ensuring that federal agencies work together on rebuilding U.S. industry will require leadership from the White House. It’s time to establish a national manufacturing policy overseen and coordinated by the executive branch. In particular, the White House National Economic Council should make industrial strategy a key part of its mission.

Other nations are already embarking on electric vehicles and other breakthrough technologies. U.S. manufacturers deserve an equal footing in their home market as they compete in these new industries. However, unless Washington steps up, America’s manufacturers will keep losing ground in the one market that matters—their home base.

About the Writer

Michael Stumo is CEO of the Coalition for a Prosperous America. He wrote this for InsideSources.com.

[activecampaign form=31]

RELATED TOPICS:

DON'T MISS

When Newsom Gives His State of the State, He Should Be Candid About California’s Economy

DON'T MISS

CA’s Liberal Government Has a Long History of Caving to Special Interests

DON'T MISS

Newsom, Legislators Opt for Gimmicks and Wishful Thinking to Close California’s Budget Deficit

DON'T MISS

Courage to Embrace Change: El Rio Reyes Conservation Trust Boldly Rebrands as Kings River Land Trust

DON'T MISS

Committed to Politics or Committed to Fresno’s Children?

DON'T MISS

Repealing Prop. 47 is a Misguided Battle Cry. It Won’t Make California Safer.

DON'T MISS

Misty Her Might Be Best Superintendent Candidate. But Fresno Unified Still Needs a Statewide Search.

DON'T MISS

How California’s Prized Solution for Methane Gas Is Backfiring on Farmers

DON'T MISS

Many Californians Rely on This Farmers Market Program. Newsom Wants to Cut It

DON'T MISS

Carbon Capture Storage Is Key to California’s Economy & Energy Future

No data was found

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

8 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

8 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

8 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

8 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

9 hours ago

Biden’s Fundraiser with Obama and Clinton Nets a Record $25 Million, His Campaign Says

9 hours ago

Fresno Unified’s Self-Protection Racket Is Hurting Our Kids

9 hours ago

Rockin’ Out or Laughing, the Valley Has Its Pick of Weekend Events

10 hours ago

Ex-Correctional Officer at Women’s Prison in California Sentenced for Sexually Abusing Inmates

12 hours ago

Caitlin Clark and Iowa Draw Nearly 5 Million Viewers for Second-Round NCAA Win

13 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

PGA HOPE, now underway at Fresno’s Riverside Golf Course, is designed to introduce golf to veterans and active duty military members t...

6 hours ago

PGA HOPE at Fresno's Riverside Golf Course
6 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

7 hours ago

Cronenworth’s Big Hit Helps Lift the Padres to a 6-4 Win Over Melvin’s Giants

8 hours ago

Shohei Ohtani Reaches 3 Times in Home Debut as the Dodgers Rout the Cardinals 7-1

8 hours ago

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

8 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

8 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

8 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

9 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

MENU

CONNECT WITH US

Search

Send this to a friend