In theory, it’s a good idea: buy American and you’ll boost the country’s economy. A bigger demand for American products will result in more jobs for the American people. This will help lower unemployment rates and make it easier for American families to survive and thrive.
In practice, the executive order may just be smoke and mirrors.
We’ve been importing products from other countries for years. When you see “Made in China” or “Made in Taiwan,” it no longer bothers you. (“You” being relative; I’m well aware that it bothers some people.) It’s so rare to see a product that says “Made in the USA” in major stores that finding one is like finding a unicorn.
There’s also the technicality involved in the label “Made in the USA.” See, companies can have parts shipped to the U.S., then have U.S. workers assemble their products from the imported materials. So technically it is “made in the USA,” just not from American parts. (The Made in America Movement has more information on these labels.)
A series of executive orders that Trump has signed is trying to change all of that.
Now comes the part where we weigh the pros, cons, and realism of this executive order.
The Pros Of Buy American
These have already been mentioned, but just to reiterate: this can potentially give the economy a huge boost. Buying more American products increases their demand. That, in turn, increases the number of jobs in the country, because someone has to make these products.
As unemployment shrinks, people will be more likely to spend money. This is a historically proven fact: during recessions, Americans, overall, are conservative with their money. During plentiful times they tend to spend much more.
The American economy is forever caught in a cycle of recessions and booms, but this is different. Entire towns are out of work because factory jobs have been shipped overseas in order to save costs on labor and production. Trump is hoping his executive order will put a stop to all of that.
The Cons Of Buy American
Yes, there are cons to buying strictly American products.
Let’s face it: there are some things that Americans can’t produce, no matter how much they want to. Therefore, we’re going to continue to import certain goods from other countries.
A perfect example is cell phones.
Apple, Samsung, HTC, Sony and every major electronics brand sold in this nation has their production and labor done overseas. This is the reason they can rake in billions of dollars in revenue a year.
But if Apple is forced to only buy and produce American made products, they may just jump ship altogether.
It’s not like it would be hard for Apple to move to another country. There are plenty of countries who would love to have Apple set up their world headquarters there. The money that they bring in would be enough for that country to do whatever it takes to keep them there. (This is one reason North Ireland is a very popular place for international businesses.)
Of course, Trump will probably sweeten the pot and give these businesses reasons to stay over here and keep giving jobs to the American people.
But Trump can’t stop people from outsourcing everything to other countries.
Those who run strictly digital businesses often use cheap labor from overseas to fill their staff. The same person with the same qualifications would earn six figures a year, but in poorer countries, they will do the job for a few hundred dollars a month. This helps keep their overhead low and their revenue high.
How are those taxes reported? Will these businesses benefit from hiring American workers too? Or will they continue to be able to assign these tasks to cheaper workers overseas?
What about our cars?
The demand for American-made cars isn’t what it used to be, which is why the car plants have all but shut down. How will this order increase the desire to buy an American made car, especially if you’re under the belief that foreign cars are of much better quality than American-made cars?
Trump’s plan may come from a good place, but in execution, it will be horribly messy to execute.
One thing is for certain: if this executive order actually goes into effect, a lot of lawyers will be very happy.
Brian is an international speaker and coach. say hi to Brian at connect@brianrasid.com.
