At his inauguration as the first US president in 1789, George Washington wore a brown double-breasted suit of Connecticut cloth. “The cloth and buttons . . . really do credit to the manufactures of this country,” he wrote of his display of independence from British tailoring.
His successor Joe Biden this week took steps to ensure that the US government only buys “American made goods by American workers and with American-made component parts.” The effect was slightly marred by the US president sporting a Swiss-made Rolex watch as he signed executive orders.
Presidents Biden and Washington, who changed into a British-made silk suit for inauguration evening, embody an age-old tension. As leaders, they try to strengthen domestic industry; as consumers, they want high quality goods and services from wherever. The Rolex was reportedly a Christmas gift from Jill Biden, the first lady.
Patriotic purchasing is in vogue, as the US and EU try to repatriate the manufacturing of everything from vehicle batteries to medical supplies from other countries, particularly China. Anger that more vaccines are being produced for AstraZeneca in the UK than in Belgium has caused a nasty argument between the company and the EU.
The UK is having its own difficulties with imports and exports of fish and cheese as well as other goods subject to health inspections and customs checks since it left the EU. “The EU’s threats to trade in vaccines is a warning to us. We need to increase our own ability to make and grow things at home, not rely on too many EU imports,” tweeted John Redwood, a Brexit-backing MP.
But a glance around any supermarket shows that, while British shoppers appreciate local produce, they also like to roam, seeking the variety that global sourcing provides. “I’m expecting my local shop to have local bananas and tea by end of the month,” one replied sarcastically to Mr Redwood.
It is easy to be misled by today’s debate about government purchasing of goods and services, including vaccines and military equipment. There is a lot of money at stake, especially in the scramble to protect populations against coronavirus, but the sums are dwarfed by consumer spending.
US government efforts to make agencies shun foreign contracts reach back to the 1933 Buy American Act, passed after a nationalist campaign by William Randolph Hearst in his newspapers. But federal contracts are, as the US Chamber of Commerce notes, “just a sliver of the entire American market”.
Mr Biden’s order covers $600bn in federal contracts, while US residents spent $12.5tn on goods and services in 2020, according to the Brookings Institution. It is hard to shift much more federal spending — more than 95 per cent already goes to US businesses. Politicians have always been happy to bring work to their districts.
Personally, I do not want my choices to be narrowed. I recently bought a pair of British-made shoes because their local manufacture and quality appealed to me. The same applies to many foods and drinks. But being told I should buy them as a patriotic duty because the UK is suffering the consequences of leaving the EU single market and customs union is painfully dreary.
To judge by history, I am typical. British governments have flirted with cajoling people to back domestic enterprises over the years, but shoppers themselves have not co-operated. In 1978, one proposal for a Buy British campaign was abandoned after an opinion survey found that, as one study puts it, “at best, domestic consumers were ambivalent to British products”.
This is partly because governments — and the trade associations that represent national suppliers — compete with multinationals that slickly market the quality of global products. “It is tempting to throw money at national campaigns, but they are insignificant compared with brand budgets”, says David Clayton, professor at York University, and co-author of that study.
The problem also runs deeper. Many consumers in the US and UK have historically identified foreign-made goods such as Japanese electronics and German cars with higher quality. It took a long time for British brands to shed their reputation for being shoddy and Buy National campaigns — or mercantilist tweets — revive bitter memories.
There is nothing wrong with some localism. The popularity of craft products and the desire to trace what we buy, rather than just accepting an anonymous supply chain, shows the appetite for industry to be grounded. That applies as much to Cheshire cheese as Parmigiano Reggiano.
But consumers’ instinct not to mimic government purchasing habits is well founded. The line between buying American and buying Asian is fuzzier than it seems — only $25 of a $100 pair of Nike sneakers goes to the Asian company that manufactures it. Nike gets $21.50 and the US retailer keeps $50, according to the San Francisco Federal Reserve.
That also seems to be Mr Biden’s attitude, wearing a Rolex on his left wrist while he signs orders with his right hand. Pursuing different policies as a president and a citizen is wise.
john.gapper@ft.com
Source: Economy - ft.com
