The Buy‐American Practices of the US Defence Department and their Repercussions

Abstract

As tariffs on trade have been drastically reduced after lengthy negotiations, non‐tariff barriers to trade have assumed increasing relative importance. This article examines the “Buy‐American” policy of the US Defence Department which may be classified as a restrictionist procurement tactic. The term Buy‐American refers to the systematic preference for domestic products which is in effect a form of trade discrimination. More specifically, we are interested in calculating the social welfare costs caused by the Buy‐American discrimination of the Defence Department.