Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305581 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11339
Publisher: 
CESifo GmbH, Munich
Abstract: 
The latest resurgence in the U.S. of policies aimed at reducing imports and bolstering domestic production has included the expansion of Buy American provisions. While some of these are new and untested, in this paper we evaluate long-standing procurement limitations on the purchase of foreign products by the U.S. Federal Government. We use procurement micro-data to first map and detect employment effects of government purchases and then calibrate a quantitative trade model adapted to include features relevant to Buy American: a government sector, policy barriers in final and intermediate goods, labor force participation, and external economies of scale. We show that, while current Buy American provisions on final goods purchase have created up to 100,000 jobs at a cost of between $111,500 and $137,700 per job, the recently announced tightening of the policy on the use of foreign inputs will create fewer jobs at a higher cost of $154,000 to $237,800 per job. We also find scant evidence of the use of Buy American rules as an effective industrial policy.
Subjects: 
Buy American
public procurement
trade restrictions
domestic content
JEL: 
F10
F13
H41
H57
Document Type: 
Working Paper
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