It’s one thing to encourage Americans to “Buy American,” it’s something else to compel it—and to spend hundreds of billions of taxpayer dollars to try to make it happen.
After decades of a general consensus that international trade is good and benefits both the buyers and sellers, President Donald Trump changed course. He stressed encouraging U.S.-based companies to re-shore manufacturing and Americans to buy U.S.-made products.
That emphasis caught on with millions of Americans, and now Joe Biden has made it a central theme of his campaign.
But there’s a difference: Trump encouraged companies to re-shore by:
- Signing a major tax reform bill in 2017 that lowered the corporate income tax to 21 percent, making the U.S. tax competitive with other developed nations; and
- Reducing regulations that made it easier for companies to make decisions and act on them.
Biden, by contrast, wants to increase taxes and regulations on business—and everyone else, for that matter—and throw hundreds of billions of strings-attached dollars to make it happen. He proposes:
- $4 trillion in new taxes over 10 years by raising the corporate income tax to 28 percent—which isn’t as high as the 35 percent it was, but still much higher than the average EU country; and
- Putting $700 billion (for now) in the federal government’s hands to buy American products and services and to fund certain types of research.
In other words, Trump made it attractive to re-shore by leveling the playing field. Biden’s plan would make it less attractive to re-shore, and so Washington will have to take steps to force companies to return if they won’t.
But that’s not all. He intends to use the $700 billion in new federal spending to promote social justice issues. That means the money will go to politically favored individuals, companies and organizations rather than the most efficient businesses.
Strangely, Biden thinks his measures will strengthen international relations. But how does it enhance foreign relations with a country when the U.S. is subsidizing or compelling U.S.-based companies to close up their foreign factories and come home?
Put it like this: All of the major foreign car manufacturers make some of their vehicles in the U.S., and we’re glad they make those investments and employ American workers. Would Americans appreciate it if those foreign manufacturers closed their U.S. factories because those countries wanted all of the vehicles made at home?
For all Democrats’ whining about “failed Trump economic policies,” their thinly veiled effort to co-opt part of the Trump economic blueprint tells a different story. The problem is they want to embrace the least efficient parts of the Trump approach and eliminate the most effective.