Economic Program | Memo

The “Buy American” Provisions in the Economic Recovery Package

by Anne Kim, Jim Kessler and John Lageson

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SUMMARY

This memo describes three alternatives to the “Buy American” provisions in the economic recovery package. This memo argues for replacing the buy American provisions with one of three options for boosting U.S. manufacturing:

  1. A bonus R&D tax credit for U.S. manufacturers;
  2. A tax break on repatriated overseas earnings that are used for increasing production capacity; and
  3. Putting pressure on China to increase domestic demand for household consumption to correct the US-China trade imbalance.
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