Letters

More than 250 Leading Economists Warn Trump Administration: “Buy America” Provision Would Harm American Response to Coronavirus

May 13, 2020

(pdf)

The Honorable Donald J. Trump
President of the United States
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

The Honorable Nancy Pelosi
The Speaker of the House of Representatives
The Capitol
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
United States Senate
The Capitol
Washington, DC 20510

Mr. President, Speaker Pelosi, and Leader McConnell:

Government mandates, export controls, and other trade restrictions are proliferating around the world as countries confront the COVID-19 pandemic. Generally inadvisable, these actions will undermine a strong recovery.

The United States has already imposed restrictions on the export of health and medical resources. Policymakers are considering the imposition of new Buy America requirements for medical goods and pharmaceutical products, either by executive order or legislation.

Current shortages of critical medical goods in the Covid-19 pandemic have revealed to all the desirability of diversifying sources of supply and increasing inventory of storable medical goods. Diversifying supply sources and increasing inventories will be costly, but a broad Buy America regime will be more costly. The variety, supply, and price of goods available to Americans will suffer under a broad Buy America regime. Taxpayers and patients will pay more for drugs and medical supplies. Smart policies such as federal government stockpiling look more promising.

A Buy America directive can also hamstring the ability of U.S. pharmaceutical and medical equipment manufacturers to meet our future needs if firms are denied access to essential foreign supplies. Moreover, we can expect our trading partners to adopt retaliatory “Don’t Buy American” barriers targeting U.S. exports as this type of retaliation is already occurring between other countries.

The President’s intuition was correct when in 2018 he called for zero tariffs, zero non-tariff barriers, and zero subsidies.

For the United States to make a rapid and strong recovery from the pandemic, we urge leaders to stand strong against those in the United States and abroad who seek to disrupt trade in essential medical products. Instead, the United States and its trading partners should pursue policies that make medical supplies more plentiful and affordable. Costly protectionism should not be foisted on patients at home and abroad.

cc:
The Honorable Lawrence Kudlow
Director, National Economic Council
1650 Pennsylvania Avenue NW
Washington, DC 20500

cc:
The Honorable Robert E. Lighthizer
U.S. Trade Representative
600 17th Street NW
Washington, DC 20508

cc:
The Honorable Steven T. Mnuchin
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220

Signed,

Susan Ariel Aaronson George Washington University and Centre for International Governance Innovation	Theresa M. Greaney University of Hawaii	Michael J. Orlando University of Colorado Denver
Bahram Adrangi The University of Portland	Kenneth V. Greene Binghamton University	Arvind Panagariya Columbia University
Dennis J. Aigner University of California, Irvine	Bronwyn H. Hall University of California, Berkeley	Donald O. Parsons George Washington University
Lee J. Alston Indiana University	Daniel Hall High Point University	Jeffrey M. Perloff University of California, Berkeley
James E. Anderson Boston College	Steven Hamilton George Washington University	Timothy J. Perri Appalahian State University
Richard James Arnott University of California, Riverside	James Hammitt Harvard University	Mark J. Perry University of Michigan-Flint
Cristino R. Arroyo Johns Hopkins University SAIS	Bruce E. Hansen University of Wisconsin	Peter A. Petri Brandeis University
Aniruddha Bagchi Kennesaw State University	Joseph Haslag University of Missouri	Joshua C. Pinkston University of Louisville
Dean Baim Pepperdine University	Seid Y. Hassan Murray State University	Alicia Morgan Plemmons Southern Illinois University Edwardsville
Charles W. Baird California State University, East Bay	Andreas Hauskrecht Indiana University	James E. Prieger Pepperdine University School of Public Policy
Humberto Barreto DePauw University	Thomas Hazlett Clemson University	Thomas J. Prusa Rutgers University
Atin Basuchoudhary Virginia Military Institute	David Henderson Hoover Institution	Reza M. Ramazani Saint Michael's College
Charles M. Becker Duke University	Michael J. Hicks Ball State University	R. David Ranson HCWE & Co
Robert L. Beekman University of Tampa	Bradley K. Hobbs Clemson University	Surekha K. Rao Indiana University Northwest
Daniel L. Bennett Baylor University	Stephen P. Holland University of North Carolina Greensboro	Gordon C. Rausser University of Calfornia, Berkeley
Tibor Besedes Georgia Institute of Technology	Douglas Holtz-Eakin American Action Forum	Ranajoy Ray-Chaudhuri Muhlenberg College
Zakary Bishop University of Idaho	Jeremy Horpedahl University of Central Arkansas	Arthur J. Raymond Muhlenberg College
Geoffrey A. Black Boise State University	Gary Clyde Hufbauer Peterson Institute for International Economics	Alessandro Rebucci Johns Hopkins University
Luisa Blanco Pepperdine University	Jennifer Hunt Rutgers University	Kara M. Reynolds American University
William Blankenau Kansas State University		Sherman Robinson Nonresident Senior Fellow, Peterson Institute for International Economics
Wesley Blundell California State University, East Bay	Robert Inman University of Pennsylvania	Malcolm Robinson Thomas More University
Elizabeth C. Bogan Princeton University	J. Bradford Jensen Georgetown University	Andrew K. Rose UC Berkeley
Cecil E. Bohanon Ball State University	Kent Albert Jones Babson College	Justin M. Ross Professor of Public Economics, Indiana University
Martin Boileau University of Colorado	John H. Kagel Ohio State University	Elyce J. Rotella University of Michigan
Michael Bond University of Arizona	Yener Kandogan University of Michigan-Flint	John Ruggiero University of Dayton
Severin Borenstein University of California, Berkeley	Cem Karayalcin Florida International University	Thomas F. Rutherford University of Wisconsin
Barry Bosworth Brookings Institution	Jonathan M. Karpoff University of Washington	Joseph T. Salerno Pace University
Donald Boudreaux George Mason University	J R Kearl Brigham Young University	Tim C. Salmon Southern Methodist University
Nicole M. Boyson Northeastern University	Timothy J. Kehoe University of Minnesota	Emily Sanchez American Chemistry Council
John Charles Bradbury Kennesaw State University	Jason T. Kerwin University of Minnesota	Raymond D. Sauer Clemson University
Scott Bradford Brigham Young University	Kent Kimbrough Duke University	James W. Saunoris Eastern Michigan University
Klajdi Bregu Indiana University South Bend	Daniel B. Klein George Mason University	Frederic Sautet The Catholic University of America
Jason Brennan Georgetown University	Kenneth Kletzer University of California, Santa Cruz	Richard L. Schmalensee Massachusetts Institute of Technology
Harry G. Broadman Johns Hopkins University and Berkeley Research Group LLC	Christopher Knittel Massachusetts Institute of Technology	Carol A. Scotese Virginia Commonwealth University
Gregory J. Brock Georgia Southern University	Paul R. Koch Olivet Nazarene University	Carlos Seiglie Rutgers University-Newark
John C.Brown Clark University	Brent Kreider Iowa State University	Gautam Sethi Bard College
Kristy Buzard Syracuse University	Pravin Krishna Johns Hopkins University	Stephen J. Silver The Citadel
Bruce Caldwell Duke University	Anne O. Krueger Johns Hopkins University	Nirvikar Singh University of California, Santa Cruz
Charles W. Calomiris Columbia University	Kishore G. Kulkarni Metropolitan State University of Denver	Timothy M. Smeeding University of Wisconsin-Madison
Donald E. Campbell The College of William and Mary	Praveen Kumar University of Houston	Daniel Joseph Smith Middle Tennessee State University
James H. Cardon Brigham Young University	Sumner La Croix University of Hawaii	Jeffrey A. Smith University of Wisconsin-Madison
Anthony M. Carilli Hampden-Sydney College	James Lake Southern Methodist University	Pamela J. Smith University of Minnesota
James L. Caton North Dakota State University	John S. Lapp North Carolina State University	Vernon L. Smith Chapman University
Nathan W. Chan University of Massachusetts Amherst	William H. Lehr Massachusetts Institute of Technology	Vincent Smith Montana State University
Winston Chang University at Buffalo, State University of New York	Pierre Lemieux Independent Institute	Thomas J. Snyder University of Central Arkansas
Yan Chen University of Michigan	Yang Liang San Diego State University	Robert Sonora University of Montana
Menzie D. Chinn University of Wisconsin, Madison	Tony Lima California State University, East Bay	Jeffrey W. Steagall Weber State University
Harold Christensen Delphi Econometrics	David Lindauer Wellesley College	Houston H. Stokes University of Illinois at Chicago
Douglas Coate Rutgers Univ., Newark	Christopher Lingle Universidad Francisco Marroquin	Sebastian Strauss Brookings Institution
Warren Coats International Monetary Fund (Retired)	Charles R. Link University of Delaware	Ladislav J. Sula Loras College
Boyd D. Collier Tarleton State University	Hong Liu Washington University in St. Louis	Daniel A. Sumner University of California, Davis
Michael B. Connolly University of Miami	Xuepeng Liu Kennesaw State University	Scott Sumner Bentley University
Mark Copelovitch University of Wisconsin - Madison	Ted Loch Rice University	Steven M. Suranovic George Washington University
Peter R. Crabb Northwest Nazarene University	Mary Lovely Peterson Institute for International Economics	Constantinos Syropoulos Drexel University
Erik D. Craft University of Richmond	Ashley Lyman Professor Emeritus of Economics and Statistics, University of Idaho	Steve Szeghi Wilmington College
Peter Cramton University of Maryland	David A. Macpherson Trinity University	Robert Tatum University of North Carolina Asheville
Kailah Crisostomo University of Idaho	Burton G. Malkiel Princeton University	Linda L. Tesar University of Michigan
Meredith A. Crowley University of Cambridge, Cambridge, UK	Trey Malone Michigan State University	Clifford F. Thies Shenandoah University
Peri Agostinho Da Silva Jr. Kansas State University	Khawaja S. Mamun Sacred Heart University	Lloyd Thomas University of Missouri
Alan Deardorff University of Michigan	Abir Mandal University of Mount Olive	James B. Thomson The University of Akron
Judith M. Dean Brandeis University	Michael L. Marlow Cal Poly, San Luis Obispo	Edward J. Timmons Saint Francis University
Jeffery L. Degner, M.A. Cornerstone University	Chris Martin Hillsdale College	Anh N. Tran Indiana University
Alan E. Dillingham St. Mary's College of Maryland	Eric S. Maskin Harvard University	Kenneth Troske Univerity of Kentucky
Amitabh S. Dutta Florida Institute of Technology	Keith E. Maskus University of Colorado Boulder	Stephen J. Turnovsky University of Washington
Gerald P. Dwyer Clemson University	Timothy Mathews Kennesaw State University	Laura D. Tyson University of California, Berkeley
Franklin R Edwards Columbia University	John G. Matsusaka University of Southern California	Richard Vedder Ohio University
Barry Eichengreen University of California, Berkeleyn	Merrill Matthews Institute for Policy Innovation	Tam Bang Vu University of Hawaii at Hilo
Joe K. Elling APA-The Engineered Wood Association	Steven Matusz Michigan State University	Andrea Waddle University of Richmond
Can Erbil Boston College	Sharon L. May Maryville College	Gary A. Wagner University of Louisiana at Lafayette
Fred G. Esposto Kutztown University of Pennsylvania	Wolfgang Mayer David Sinton Professor, University of Cincinnati	Megan M. Way Babson College
Yariv Fadlon Muhlenberg College	Daniel McFadden University of California, Berkeley	David E. Weinstein Columbia University
Merton D. Finkler Lawrence University	Warwick J. Mckibbin Brookings Institution	Frank D. Weiss Retired
Price V. Fishback University of Arizona	Walter W. McMahon University of Illinois at Urbana-Champaign	Christopher Westley Florida Gulf Coast University
John A. Flanders Central Methodist University	Robert F. McNown University of Colorado Boulder	Geoffrey Woglom Amherst College (emeritus)
Michele U. Fratianni Indiana University	Brian J. Meehan Berry College	Michael Wohlgenant North Carolina State University
Daniel Friedman University of California, Santa Cruz	John Merrifield University of Texas at San Antonio	Barbara L. Wolfe University of Wisconsin-Madison
K.C. Fung University of California, Santa Cruz	Ronald I. Miller Columbia University	Art Woolf University of Vermont
William G. Gale Brookings Institution	Daniel L. Millimet Southern Methodist University	Brian D. Wright University of California, Berkeley
Michelle R. Garfinkel University of California-Irvine	Devashish Mitra Syracuse University	Robert E. Wright Augustana University
George C. Georgiou Towson University	James E. T. Moncur University of Hawaii at Manoa	Bruce Yandle Clemson University
Fabio Ghironi University of Washington	John C. Moorhouse Wake Forest University	Gary W. Yohe Wesleyan University emeritus
Animesh Ghoshal DePaul University	Theodore Moran Georgetown University, Peterson Institute for International Economics	Yoto V. Yotov Drexel University
Michael Giberson Texas Tech University	Petra Moser New York University	Eric R. Young University of Virginia
Richard J. Gilbert University of California, Berkeley	Jonathan M. Murphy George Mason University	Ernest M. Zampelli The Catholic University of America
Joseph W. Glauber International Food Policy Research Institute	Robert Murphy Boston College	Jeffrey Zax University of Colorado Boulder
Judge Glock Cicero Institute	Usha Nair-Reichert Georgia Institute of Technology	Albert Zevelev Baruch College
Robert Gmeiner Kennesaw State University	Douglas Nelson Tulane University	Buhong Zheng University of Colorado Denver
Stephan F. Gohmann University of Louisville	Pamela J. Nickless UNC Asheville	John Jeffrey Zink Morningside College
Nathan P. Goodman George Mason University	Raymond C. Niles DePauw University	Joseph A. Zoric Franciscan University of Steubenville
Corbett Grainger University of Wisconsin - Madison	Stephen A. O'Connell Swarthmore College	Thomas Zylkin University of Richmond
Alan P. Grant Baker University	Patrick O'Reilly West Virginia University	Wendy Lee Gramm Retired
Philip E. Graves University of Colorado, Boulder	David Orden Virginia Tech