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Leading Economists Agree: "Buy America" Proposal Would Harm American Patients and Taxpayers

Economic protectionism is more harmful than ever during the COVID-19 crisis, but prominent policymakers are considering a "Buy America" regulation that would prevent American patients from sourcing medical treatments from American allies. More than 250 leading economists have now sent a letter to President Trump and Congress urging them to make sure Americans can get the needed medical care, supplies, and pharmaceuticals they need.

Leading economists, including Nobel prize-winners and former members of the White House Council of Economic Advisers, are urging President Trump and Congress not to implement "Buy America" provisions that would make it harder for Americans to get the medical supplies and drugs they need in this crisis.

Learn More:

The U.S. Can Make It Easier for Pharmaceutical Companies to Invest in America, While Retaining a Robust Global Supply ChainPrepare for a COVID-19 Vaccine by Expanding the Role of PharmacistsPrioritizing Deregulation, Not Trade Protectionism, Will Aid Economic Recovery

In the letter below, the economists write that the American health care system would suffer under a "Buy America" regime, and that it's more necessary than ever to enable that patients have access to the best treatments they can get.

In 2018, President Trump declared that a zero-tariff free-trade goal was what his Administration is working for. "Buy America" is unfortunately about erecting new trade barriers, not tearing them down.

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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