President Donald Trump has taken a long interest in America’s trade deficit. Before handing out one of his signature red MAGA hats, he spent decades discussing ways to restore America’s manufacturing base.
While the dust is still settling from Liberation Day, as nations worldwide look for ways to work out a trade agreement that eases reciprocal tariffs on American-made goods and the U.S. levies further tariffs on China, Trump is still laser-focused on bringing jobs back to the states. While tariffs can play a critical part in reshoring American industry, an underused tool is the power of the federal contract.
Government departments spend untold trillions of taxpayer dollars a year buying products from across the globe for their use and the broader public’s well-being. The federal government purchases everything from furniture to computers to medicine every year. Sometimes, this spending gets out of hand. In the 1980s, the Pentagon spent $640 per toilet seat and over $7,600 on coffee machines. As recently as 2018, the military was spending $10,000 on toilet seat covers for airplanes. While those are egregiously overpriced items, the point is that the military doesn’t nickel-and-dime when it comes to expenses.
Given that the federal government is willing to pay above market value for a specific product and is a guaranteed consumer, the Trump administration could use the strength of federal contracts to reshore American manufacturing.
During the darkest days of the COVID pandemic there were regular shortages of baby formula, various brands of acetaminophen and ibuprofen, and even military equipment as many nations continued lockdowns even as parts of the United States had reopened. Our dependency on the global economy for essential products should not be tolerated. Even if we don’t see another global pandemic, we shouldn’t rely on the temperaments of foreign labor to ensure our nation’s well-being and safety.
Federal departments, like the Pentagon, could map out a list of medical and military products that could be produced in the United States but are currently made overseas and announce that beginning in 2027, they will only purchase those products from companies that make them entirely within the 50 states. Giving a date in the future gives the companies time to find a talented workforce and build factories and generates favorable news coverage over a more extended period—when the company makes the deal, when they announce the site, when they hire the workers, and when the jobs report shows positive numbers in manufacturing and distribution.
If the Trump administration wanted, they could even go a step further, using place-based economics, and give preferential treatment to companies that either manufacture, produce, or distribute out of states that have been negatively affected by globalization. Rather than just hoping corporations reshore to the ailing cities of the Rust Belt, they could give preferential treatment to those who consciously decide to bring jobs back to that region. With the United States government and military being guaranteed purchasers of those goods, it would be profitable for the companies, and they could sell and distribute to the greater national marketplace.
This would allow Trump to fulfill multiple campaign promises without aggressively disrupting market forces or negatively affecting the stock market.
Weaponizing federal contracts and ensuring we reindustrialize our nation are in the best interests of both the country and the Trump administration. It can be done without being accused of causing international chaos.
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