What Does "Buying American" Mean for Construction

Posted: 2/28/2017

American made

We are all well aware that infrastructure spending is on the agenda for Trump.  We also know that buying American is important to him, so, how will these two agenda items collide in construction?

NPR interviewed Jim Tymon, chief operating officer for the American Association of State Highway and Transportation Officials.  He said, "I think for the most part that means business as usual.  There are already requirements in federal law that require state DOTs and local transit agencies to buy American products as they construct infrastructure projects around the country."

Those requirements are called "buy American" and are a federal law.  The requirements were put in place in the late 1970s when the steel industry saw a major downturn.  They were eventually expanded to nearly all federal grant-funded transportation projects.

Tymon goes on to say, "For folks building highways and bridges in this country, it really is the default to use locally and American-made products because they're locally available and sometimes cheaper."

What makes these requirements difficult is that American-made steel costs 70-80% more than Chinese steel.  The difference is slightly less taking into consideration cost to ship, but it is still significant, according to Jeff Davis, senior fellow at the Eno Center for Transportation, a non-partisan policy think tank in Washington DC.

Rich Juliano of the American Road and Transportation Builders Association says another problem lies in purchasing items on the fly.  Is it required to get documentation for where nuts, bolts, or tie-wires were produced in order to comply?  How strict will this rule be? 

So, "buy American" means the steel industry retains its employment, but more tax money goes to materials for federally funded construction projects.  It comes down to priorities.  Do we prioritize lessening the burden on the tax payer or maintaining jobs in the steel industry?

Read more about this at NPR. 

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