Is 'Buy America' at Risk?

(Maurizio Gambarini/picture-alliance/dpa/AP Images)

President Trump sent European Union leaders reeling with his demands that their countries “buy American” during his combative mid-July tour of the continent. But in the president’s continuing quest to contradict himself and discombobulate opponents, federal transit officials back home are going through an elaborate show of garnering public feedback on a potentially explosive topic that could undermine the Reagan-era Buy America program that helps protect certain American industry jobs.

“What is a Federal Project?” is a seemingly innocuous question posted in the Department of Transportation’s “Ideas” online forum, which solicits feedback on prospective initiatives.  In this case, the Federal Transit Administration wants to speed up the conception, construction, and delivery of transit projects by recasting how “federal projects” are defined.

Federal transit officials intend to “review the thresholds for defining whether a project or project element qualifies as federally funded, which determines whether it is subject to various federal requirements, reviews, and oversight.” Changing project definitions for programs like NEPA (National Environmental Policy Act), the Metropolitan, Statewide and Non-Metropolitan Planning program, and Buy America—the three programs curiously cited as examples worthy of scrutiny in the forum post—could affect “the timely and effective implementation of transit projects.”

Redefining terms like “federal project” may seem like an eyerolling bureaucratic exercise to the uninitiated. But it’s just these types of maneuvers, ones that few people outside the federal sphere understand, that have powered the deregulatory juggernaut that Trump administration officials have unleashed with astonishing speed over the past one and a half years. Rewriting definitions is one way to eviscerate long-standing programs that protect Americans from a host of threats—from environmental degradation to increased unemployment.

According to the Alliance for American Manufacturing, the FTA appears poised to undermine the Buy America program. Established in 1982, the Transportation Department program requires state and local recipients of aviation, railroad, transit grants to use American-produced iron, steel, and manufactured components in their projects.

Absent such programs, says Alliance President Scott Paul, we end up with the issues besetting the Bay Bridge connecting San Francisco and Oakland. Portions of the bridge were made in China and the project, completed in 2015, has been plagued by numerous design and engineering problems, including the use of substandard steel. Using American-made steel, of course, would also have benefited American steelworkers.

Paul sees the FTA question as a signal that the administration intends to do exactly the opposite of bolstering American industry. Rather, it’s a new push that could undermine the domestic industries by loosening regulations, so that states and localities can use their federal dollars to buy cheaper Chinese iron and steel to build infrastructure projects (which, in turn, would appear to undercut the tariff war that Trump has unleashed).

“If you look to the rhetoric of the president in particular, it’s all about ‘Buy American,’” Paul told The American Prospect. “But if you look at the administration, you see Transportation Secretary Elaine Chao—on the record—opposing Buy America. Anytime I see something as broad as this [policy proposal], it can certainly be viewed as a ruse not only for massive deregulation but for opening up loopholes that would undermine Buy America laws that help our workers.”

Indeed, at a Senate Commerce Committee hearing earlier this year, Democratic Senator Tammy Baldwin of Wisconsin engaged Chao in a brief but testy discussion over the administration’s failure to mention Buy America in its infrastructure plan.

How members of Congress would respond to an outright assault on Buy America laws is unclear. Paul says that although there has been “good bipartisan support” for the program, some who favor outsourcing that have tried to “poke holes” in Buy America.

“I am confident that we can maintain the status quo in the Congress; what worries me the most right now is any regulatory attempt to undermine those protections through the back door,” Paul says.

Yet whether or not they use federal dollars, transit agencies in Boston (MBTA), Chicago (CTA), Los Angeles (LA Metro), and Philadelphia (SEPTA) have already inked deals with CRRC, a Chinese state-owned rail car manufacturer. LA Metro has met the Buy America provisions requiring 60 percent of those components to be American-sourced, and Chicago will also use U.S. steel. CRRC plans to construct plants in both cities and hire local workers.

Boston did not use any FTA funds for the nearly 400 cars and, according to China Daily, a state-owned newspaper, the steel used for the cars “come[s] partly from the U.S. and partly from China.” (Work on LA Metro and Philadelphia’s SEPTA rail cars will also take place in Massachusetts; CRRC built a plant in Springfield, the state’s third-largest city.)

Bloomberg Government has reported that some members of Congress fear that incumbent rail car manufacturers in allied countries like Canada, Japan, and South Korea won’t be able to compete with CRRC, which as a state-owned entity can underbid those firms, and is effectively poised to dominate the U.S. transit manufacturing market. (There is no existing U.S. rail manufacturer.) Other lawmakers have national security concerns.

If recent history is any guide, Buy America supporters may want to gear up for the battle ahead. Trump’s FTA has already been blasted for putting transit projects across the country at risk by giving them what Bloomberg called the “Gateway Treatment,” by changing the way federal funds are allocated, so that states and localities will be required to pick up more of the tab. It’s a backhanded move that almost guarantees that localities will not be eligible for federal funds because they can’t cobble together the awesome sums of money required to build a major transit project. Going after Buy America and other transit programs appears to be the next chapter in the Republican playbook—Trump’s rhetoric and campaign promises notwithstanding.

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