COVID-19

Buy America order could worsen medical supply shortages, economists say

Nancy Marshall-Genzer May 12, 2020
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The Port of Los Angeles. The Buy America initiative may raise the price of medical supplies imported from China. Mario Tama/Getty Images
COVID-19

Buy America order could worsen medical supply shortages, economists say

Nancy Marshall-Genzer May 12, 2020
The Port of Los Angeles. The Buy America initiative may raise the price of medical supplies imported from China. Mario Tama/Getty Images
HTML EMBED:
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More than 200 economists have signed a letter asking the Trump administration not to impose Buy America restrictions on medical supplies. The letter won’t be officially released until Wednesday, but we got an advance copy. The economists are worried that a new Buy America order would hurt American consumers.

White House trade adviser Peter Navarro has been talking about it for weeks now — an executive order that would require government agencies to only buy U.S.-made medical products. 

“Buy American is going to be the law of the land, I believe, soon — at HHS, at DOD, the Veterans Administration,” Navarro said on Fox News this month.

Navarro didn’t respond to request for comment, so it’s unclear exactly what the Trump administration has in mind. But the economists’ letter says a Buy America order could cause even more medical supply shortages. Bryan Riley, director of the Free Trade Initiative at the National Taxpayers Union, which spearheaded the letter campaign, said the executive order could apply to “anything that could be classified as personal protective equipment. From hand sanitizer to medical gowns.”

The letter says the order would also push up the cost of medical supplies and possibly drugs for consumers. Mary Lovely, professor of economics at Syracuse University, signed the letter. She said to just look at the prices of medical supplies from China that were, until recently, subject to 25% U.S. tariffs.

“On average, prices rose between 25 and 30%,” Lovely said.

But other economists, like Christine Ries, professor of economics at the Georgia Institute of Technology, would be OK with a Buy America order if it included price controls in exchange for subsidies or tax breaks.

“The company would have to certify that yes, this was Buy American and yes they were keeping the price at the same level as when China was supplying,” Ries said.

The Buy America debate isn’t limited to economists. There are reports of considerable disagreement at the White House over Navarro’s proposal.

COVID-19 Economy FAQs

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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