Buy American as a Product of Policy
As it has come to be known, the movement of “Buy American” refers to preferential purchasing of U.S. made products on the part of its citizens. Classically seen as a protectionist strategy, it has seen a rise and fall in popularity over the last 100 years. Often classified as a social undertaking, the rollercoaster effect this crusade has been subject to has directly coincided with governmental policies regarding the issues. As economic immersion often goes, the government’s involvement in promoting the advancement of American industry has come in many forms and intensities over the years. Taking an objective view at the approach, one could easily see that many of the regulatory processes put into place have been a direct result of international conflict or domestic financial struggles. However, for each situation, the methodology which policy makers have used in achieving their goals has varied to a great degree, with multiple amounts of effectiveness. Rooted in many different philosophies, each approach shares a common goal: to improve the position of domestic producers in comparison to their foreign counterparts. Whether the approach to this goal is achieved through an increase in the home market price of foreign goods, or through the decrease in production costs for domestic corporations, each individual involved shares the same vision for the American manufacturer: complete domination of the market.
When analyzing the ways in which the U.S. government has gone about promoting the market status of American producers, it would only be reasonable to begin with the first major steps taken by the government. Long before the United States was an independent state, tariffs have been levied on the traders that have called it home. Originally levied by the British Empire, their mercantilist control of the economy gave preferential treatment to organizations swearing allegiance to the king. However, after gaining independence this would soon change. From a theoretical standpoint tariffs are simply taxes imposed on goods entering the country from abroad.
Often seen as the most popular form of protectionist policy, there a great number of benefits to the nation as result of their existence. The first and foremost of these profits is the amount of income garnered by the government. As this capital is coming from a foreign source, this creates a gain in the Gross National Product of the United States. In turn, these multinational corporations are forced to compensate for this increased cost of distribution to the nation. The most common methods by which these producers respond is either through a reduction in manufacturing costs, or by increasing the retail price paid by the consumers. In turn this gives the American based corporations a competitive advantage when bringing their goods to market. By having less associated costs of fabrication, they are able to create a higher quality product, which theoretically they are able to sell for less. However, as the market goes, so do the merchants. Thus with increased commercial prices from their competitors, they are able to increase their price mark as well. The only difference being, that with a lack of tariff requirements increasing their overhead, they are able to yield a larger profit. This excess capital can then be used to reinvest in the company to further its growth.
The national use of tariffs has seen its popularity rise and fall over the years. In addition, there has been a great deal of reform on to how tariff rates come to be. There have been two great peaks in the amount of tariffs the U.S. government has imposed on foreign distributors. The first of such rises occurred during the Civil War. In order to counterbalance the associated costs of the war, tariff levels were greatly increased on international businesses, especially those based in pro-Confederacy nations. Without the typically liberal Southern representatives to object to