Scott Lincicome explains why ‘Buy American’ policy will hurt Americans

International trade lawyer Scott Lincicome of the Cato Institute joined the “Pat & Stu” gang Thursday to talk about why “Buy American, Hire American” is a bad policy that won’t really help everyday Americans.

President Donald Trump recently signed an executive order aiming to strengthen protections on certain American-made goods.

“Unfortunately, we’re only talking about some Americans that we’re protecting here,” Lincicome said of the executive order directing federal agencies to follow Trump’s “Buy American” rhetoric. Lincicome used the U.S. steel industry as an example. He explained that U.S. steel workers number around 150,000, but 6.5 million American workers work in industries that use steel.

“So the president today, if his executive order does eventually lead to tariffs on steel imports, is actually raising the costs for all of those other companies and all of those other workers, leading to fewer workers, fewer outputs, and the rest,” he said.

Trump is not the first president to try to use protectionism to preserve jobs. President George W. Bush imposed global safeguard tariffs on steel products that actually cost hundreds of thousands of American jobs. According to Lincicome, the potential jobs saved in the steel industry ended up costing American consumers around $600,000 per year per job.

Lincicome reminded the audience that while a “Buy American” attitude sounds promising, protectionist tariffs will hit the everyday consumer first and will benefit just a few people, explaining:

Buy American sounds great. … It’s just always important to remember that when it comes to protectionism, we’re not helping all Americans. We’re helping just a few Americans, mainly the CEOs that are at the White House today standing behind the president, clapping, and we’re hurting all the other workers and CEOs who don’t get that kind of access.

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Correction: An earlier version of this article incorrectly stated how much tariffs in the steel industry cost American consumers. The potential jobs saved in the steel industry ended up costing American consumers around $600,000 per year per job.