Peter Navarro's 'Buy American' Order Would Put Americans Last
During this time of unprecedented uncertainty relatd to the novel coronavirus, American communities and industries have been voluntarily coming together to do what they can. Companies have switched over to producing medical masks. Billionaires are throwing massive amounts of personal wealth into developing open source treatments. Most recently, Google has committed to donating $800 million to help fight the spread of the virus globally, demonstrating that we are not experiencing this crisis alone.
Yet some in the Trump administration, Peter Navarro in particular, seem keen to not let a crisis go to waste.
The Director of Trade and Manufacturing Policy, and newly-minted national Defense Production Act policy coordinator, Navarro has reportedly been trying to convince President Trump to impose an executive order that would force all government agencies to “buy American.” In short, the order would require such agencies as the Department of Veterans Affairs (VA), Department of Health and Human Services (HHS), and the Department of Defence (DoD), to procure all of their medical supplies exclusively from American manufacturers. Navarro claims “none of the Buy American provisions in the proposed executive order would apply during the current COVID-19 crisis.” But even if that is true, what about the next one?
All the time, but especially in times of crisis, incentives matter. By applying only to government agencies purchasing medical supplies, the draft order sounds innocent enough as there are few Americans who do not want domestic companies to do well. However, the order would create a catastrophic incentive for companies whose supply chains are currently located outside of America to uproot their operations in an attempt to not be left out of the government’s largess.
Now more than ever, the government's business should be freeing up companies and its own bureaucracies to cooperate and acquire the necessary medical supplies in the most efficient, inexpensive, and quality way possible. Studies have shown that pharmaceutical manufacturing can cost as much as five times more in the United States than elsewhere. Forcing government agencies to only buy American made medical supplies would drastically hamper their response capabilities in times of crisis, as well as exacerbating the already exorbitant cost of prescription pharmaceuticals in our country.
Furthermore, it seems like the logistical nightmare created by this order simply hasn’t been considered by its proponents. In 2019, Medicare accounted for the purchase of more than 1 billion filled prescriptions. Medicaid accounted for another 608 million, totaling nearly 44 percent of the total amount of prescription drugs filled at pharmacies in the United States.
Under the “Buy American” order, we can presume that the Centers for Medicare and Medicaid services would be forced to buy all 1.67 billion prescriptions (20 to 50 billion pills) from only 28 percent of manufacturers globally. Even if the government would be foolishly willing to bear the increased costs for domestic pharmaceuticals, the industry simply wouldn’t be able to keep up with demand. When pharmaceutical companies experience shortages, people die.
The United States already has the highest percentage of API manufacturing facilities internationally, and a thriving pharmaceutical industry that is by far the world leader in innovation. Unfortunately for some, enough is never enough.
President Trump has, thus far, been reluctant to give in to Navarro’s request, as evidenced by his instincts to deregulate further in response to this crisis; for instance expanding telehealth access in Medicare, and allowing doctors to practice across state lines. An “America first” agenda means ensuring Americans have access to what they need first, regardless of its origin.
Again, this truth is only heightened in times of crisis. More specifically, now is not the time to be dabbling in potentially catastrophic new policies. President Trump should vehemently reject Navarro’s draft executive order that would put American patients last.
