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Rarebear's avatar

Trump signed an executive order today to "Buy American and hire American". Assuming that the order works, what effect will this have on the economy?

Asked by Rarebear (23986points) 1 week ago

This is not a question to debate the merits of executive orders, or Trump. I’m stating the hypothetical that this executive order actually “works”. How do you think this will effect the economy?

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39 Answers

Dutchess_III's avatar

Well, many of us will go without a lot of stuff.

Pandora's avatar

The hire American is the H-1B visa program, which only effects about 85000 hires for people in high positions like IT. It won’t effect the people he hires to work for him at Mar O Largo. In other words low wage earners.
It also means nothing if wages don’t go up to match the higher prices. Made in the USA is usually more expensive. So your low wage earners will not be able to afford them. And no matter how many tax breaks he gives businesses to help keep prices down, either quality will suffer, or companies will keep prices high. So the things we will be able to afford will be the same cheaply made crap we bought from China, only at a slightly higher price.
Other Presidents have tried to promote buying in the US, but companies won’t do business here unless they can make mad profits. So someone will be the poorer for it. Usually those who lack money already.

zenvelo's avatar

Zilch.

It doesn’t really force anyone to do anything except to be more vigilant in checking procurement orders to find American sources. And supposedly it means only US Steel for transportation projects.

But we know how effective that is by the use of foreign steel for the Keystone and DA pipelines.

elbanditoroso's avatar

Practical effect on me: practically nothing.

The main thrust of this is that the US Government needs to prefer US made materials in its purchasing. But if there is not a US made option, the government can buy anything else. @zenvelo made the point about steel, but there are hundreds (millions) of things that the US government buys that are made overseas. The US is not going to stop buying computers because the circuit boards are made in China or Japan.

The second thrust is that the H1B preferences for workers will be tightened. That will last about as long as a fart in a windstorm. Any company (mostly, but not all) that is hiring skilled people from India is going to squawk, and Trump will relent. There is already a shortage of educated science-trained people in the US, and lowering HB1 numbers will make it worse.

So as usual, this is a Trumpian solution to a problem. Something that has no chance of working.

funkdaddy's avatar

With the assumption that it works…

It could promote industries that are highly profitable, but not generally centered in the US to be more productive here. Government contracts are big business and carry other risks, but generally absorb the costs of labor more easily than retail manufacturing does.

Think of the defense industry, which gives preference to goods made in the US (is it a requirement?). I’m not a fan, but if you move that model to more mundane goods, you can see how it could effect skilled manufacturing businesses. If I was an American manufacturer of say medical equipment or specialized construction vehicles, I’d probably be making sure my government specific sales group was up to par, just in case.

I don’t understand the H1B reasoning at all, so can’t pretend to explain the benefit there.

Espiritus_Corvus's avatar

LOL. Say goodbye to Walmart and, worst of all, those great Walmart redneck videos.

Darth_Algar's avatar

It will have next to zero effect.

LostInParadise's avatar

If it were to have any effect, which seems unlikely, it would be to replace cheaper foreign products with more expensive American ones.

janbb's avatar

It will be lousy for Silicon Valley which has thrived and become the technological innovative center for the world because they could hire the best and brightest from all over the world – including some who were American (like my son.) If you look at many of the most successful start-ups, those at the top were initially immigrants. It is a short-sighted policy which will end up driving the most talented, skilled workers elsewhere. Sad.

Darth_Algar's avatar

No folks, it’s not going to replace the cheap, foreign-made shit we get at Walmart and Hobby Lobby.

kritiper's avatar

Rampant price inflation. And you thought you didn’t make enough money before!!!

cazzie's avatar

Read his lips…. because it’s lip service. Just like the ridiculousness with the coal industry. (but the coal industry shit is so much worse because that isn’t just NOT helping the economy it’s going to kill people, because he’s dismantling all the safety regulations involved.)

chyna's avatar

They are showing on the evening news that most of the stuff at Trumps hotels are made in China and other countries.

RedDeerGuy1's avatar

Apple smartphones will go from $500 to about maybe $2,000. When made from USA.

stanleybmanly's avatar

The effect on the economy will be trivial and everyone knows it.

Darth_Algar's avatar

Like everything else with Trump it’s meant to dazzle, but there’s little actual substance to it. It’s gold paint on cheap woodboard.

zenvelo's avatar

@RedDeerGuy1 This is not an import tax. It is an instruction for government procurement. And you are in Canada,, so it wouldn’t affect you.

Rarebear's avatar

I’m worried that long term it will drive prices up.

RedDeerGuy1's avatar

@zenvelo Sorry I was repeating something I heard in the news. About minimum wages for American workers raising locally made smartphones raising the cost of stuff. Instead of $0.35 a hour in China.

kritiper's avatar

@Rarebear Darn right it will drive prices up. Americans don’t want to be paid those low foreign wages!! And the price of those products will to up to compensate. Economics 101.

Darth_Algar's avatar

Except those products will still be manufactured overseas by cheap labor. This executive order does nothing to change that. That’s not even really within the president’s power.

cazzie's avatar

I’m afraid most folks don’t know what production industry economics are. Especially primary industry economics. I don’t know why the USA is so set on going backwards.

Rarebear's avatar

That’s the thing. Most equipment has parts from all over the world. Your Camry is from a Japanese owned car company made in the US with foreign parts.

flutherother's avatar

I think the effect will be the opposite to that intended and that it will likely depress the American economy, reduce the number of jobs in the country and make the average American worse off.

Tropical_Willie's avatar

He can’t write an executive order to, in effect STOP all imports.

There is a Regulation that states for government contracts all materials must be American made. His exec order is redundantly repetitive.

funkdaddy's avatar

I thought the premise was to assume the order “works”, no?

Tropical_Willie's avatar

@funkdaddy What ? ?

Works on what; regulations in place ?

Stop ALL imports for everyone including his Trump Towers ?

Works on Toyota, Honda, Kia, oh yah Ford, Chevy, Buick . . .

funkdaddy's avatar

@Tropical_Willie – sorry, wasn’t directed at you specifically. From the question:

I’m stating the hypothetical that this executive order actually “works”. How do you think this will effect the economy?

I read it to mean the executive order has some effect, so where would that effect show up. Since it is only going to place requirements on federal government spending, I can’t see how it would have a large impact on retail pricing or the places most of us shop.

Basically just asking what I missed.

Tropical_Willie's avatar

@funkdaddy The reg’s are in place and have been for years “BUY AMERICAN” for federally paid contracts.

It is like he is writing an executive order for “Gravity” and patting himself on his . . . . for making things fall to the Earth.

Rarebear's avatar

@Tropical_Willie That’s pretty funny. Made me chuckle. GA

Pandora's avatar

Here’s another reason why it won’t work.
http://www.cbsnews.com/news/ivanka-trump-possible-conflict-of-interest-china/
Same day Trump decides China is not a Currency Manipulator.
Geez, I wonder what changed his mind?
This whole Made in the USA is a scam for companies to pay less taxes but things will remain the same. All that is Gold does not glitter.

JLeslie's avatar

What does it mean? He is “ordering” Americans to buy American and hire American? Ordering? Can he really order the private sector to hire American? Or, order people to buy American?

If he does, we probably will have a lot more Latin Americans crossing over to work in American factories~. Half joking.

Darth_Algar's avatar

@JLeslie

No, it means that government agencies have to try purchase items and materials from American sources, where available, pretty much like they always have. It has no effect on private citizens and companies. The president doesn’t even have that kind of power.

JLeslie's avatar

@Darth_Algar Ok. So, to me it sounds like a nothing. No great change. He states things that are already in the mix. Like he and other republicans talked about Health Savings Accounts, we already have HSA’s! It’s not a new notion. A lot of people don’t know they exist. People with money do, because it’s a tax shelter.

I do think the president, whoever the president is at the time, can influence the people, and raise awareness, just by making statements. Loyal followers might change their behavior a little if their politicians are saying to spend money, or to buy American, etc.

Pandora's avatar

@JLeslie Most of his loyal followers are poor. They wouldn’t be able to afford the higher prices. So no matter how loyal they are to Trump. Like Trump, they are loyal to their wallet first.

Darth_Algar's avatar

@JLeslie “Loyal followers might change their behavior a little if their politicians are saying to spend money, or to buy American, etc.”

His loyal followers are, for the most part, poor. Give them the choice between a pair of jeans made in China but at a price tag of $10, and a pair of jeans made in America, but at a price tag of $35, they’re going to go with the $10 pair. Indeed, it’s the only option they can really afford.

JLeslie's avatar

I understand poor people have little choice, but plenty of the people who voted for him are middle class. I know hundreds where I live.

Pandora's avatar

@JLeslie, I’m middle class and I actually do try to buy American but only if the quality is superior. Rarely do I find that to be the case. American furniture use to extremely well made. Now, all you have is press wood and cardboard. American companies use to take pride their quality work. But they figured out that if they made stuff that last beyond a decade then they couldn’t count on you as a repeating customer. So they made stuff that would degrade, and fall apart in about 5 years, only they began to charge more. It’s not just them. It’s just about every nation. My bedroom furniture is all wood. I bought it over 30 years ago and it has gone through a lot of moves and taken some dings but it has held together very well. I’ve had other furniture not survive as well but they were not made of quality wood. I often want to go buy another bedroom suite but when I compare the so call quality of their hi end American made products to what I have the prices are crazy. It would be cheaper for me to pay someone to re-finish my suite.

JLeslie's avatar

@Pandora A lot of people look for made in America, and a lot don’t. My only point is some people are influenced to change their behavior when their politician, friends, family, or church makes them aware, or gives them reason to feel
Proud or shameful regarding that particular thing.

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