Just as King Hlaudi and his loss-making 90% local content policy at the SABC and the fading away of the Made in South Africa campaign showed, patriotic buying only works when it fits the purse. That is why US President Donal Trump’s Buy American executive order will be doomed to failure, predict most commentators.
But, in the process it could harm South African manufacturers exporting to the US – or those hoping to gain a foothold in the world’s biggest consumer market.
Trump’s Buy American and hire American executive order aims to promote the use of American-made goods and American labour. In short it states that all purchases or acquisitions of goods, products, or materials by the federal government must be produced in the US. This includes iron, steel and other manufactured goods.
The hire American rules is designed to protect domestic workers and states that jobs should first be offered to US citizens before looking at workers from other countries. The country’s H-1B visa program, which enables the employment of more than 80 000 foreigners annually, has been reformed and will now only be given to the most skilled and highest paid applicants should an American citizen not be able to fulfil a certain job’s criteria.
Many believe that the new law is impractical and will not be sustainable in the long run. Reasons they predict the new ruling will fail include:
- The executive order is unclear and does not ensure that anything will change.
- It is difficult to find all-American products as defined in the executive order. It requires all products in the manufacturing process from the melting of steel to the coating applications at the end of the process to have occurred in the US.
- What exactly defines the extent of locally-made products. How does one define the American-made content of goods? Is it by weight, by dollar value, by the amount of labour involved?
- Buying American only will means US infrastructure projects will most likely become more expensive as they rely mainly on steel beams and rods, which will now have to be fully locally manufactured and cannot be cheaper imported versions that serve the same purpose. Trump’s pledge to improve US infrastructure will also be affected by this new rule, which may make materials more expensive and could result in projects costing more or fewer projects being taken on.
- All construction companies working on federally funded projects will now have to use 100% American-made components compared to previous laws that stated only 50% of products had to be American-made.
- US companies are now forced to purchase from local companies, which could charge higher prices than other producers.
- Trump is touting the fact that he wants to buy and hire an American to promote the use of American-made goods and American labour, but he himself hires foreign workers at a low cost for his Florida resort Mar-a-Lago under the H-2B visa system. The H-2B visas allow US employers or agents who meet requirements to bring foreign nationals to the US to fill temporary non-agricultural jobs.