The Strategist

Trump signs "Buy American, Hire American"

04/19/2017 - 11:49

President of the United States Donald Trump signed a decree, which is known as "Buy American, Hire American," Reuters reports. It is designed to stimulate domestic production, and stipulates revision of rules of issuance of H-1B working visas.

Gage Skidmore
Gage Skidmore
In particular, the authorities intend to emphasize priority of the most qualified employees that apply for the H-1B visa. At the moment, this visa is issued on the principle of a lottery. 80% of workers who arrived in the United States on an H-1B visa earn less than the average salary of their industry.

During his first major press conference after winning the election, Donald Trump told almost nothing about domestic politics yet promised to create another medical program, as well as many new jobs.

The US president started his first speech in Congress from listing achievements that his administration can already write down to his account. In particular, he mentioned promises of the largest companies to create "tens of thousands of new jobs" in the country and the ups and downs in the stock market.

Trump announced the above-mentioned decree during his election campaign, recall the media. In particular, he pointed to disadvantages of the North American Free Trade Area, which, in addition to the United States, includes Canada and Mexico. He promised that it would make NAFTA "more fair" for his country.

In the past few years, the US government has issued 85,000 visas for highly skilled foreign workers, the Wall Street Journal points out. The program is very popular in the technology industry, and about 15% of Facebook’s employees worked on this visa, it follows from Reuters’ analysis of the Ministry of Labor’s data.

One of Trump's main campaign promises was to protect the American labor market and American goods. "We will return our jobs. We will return our borders. We will return the wealth ... following two simple rules: buy American and hire Americans", he said in his inaugural speech.

The decree was signed during Trump's trip to the city of Kenosha in Wisconsin, belongs to the so-called "rusty belt" of America. At the beginning of the industrial revolution, the area was known for its steelmaking industry, which began to decline in the 80s due to a reduction in the production of steel, cars and heavy industry products.

The decree also prescribes use of American-made steel in infrastructure financed from the state budget.

Foreign-made but localized in the US steel will not comply with the directive. "It will begin immediately", Trump promised to workers at Snap-on-tool plant, standing on the background of the American flag made of spanners. He then signed the document.

To fulfill Buy American, federal agencies have to consider and minimize use of exceptions in international trade agreements and assess to what extent these documents harm the American workers. If it turns out that they have worsened lives of American workers, the agreements can be revised, warns Trump’s administration.

Some countries are skeptical of international economic integration, regardless of whether it is developing through trade management systems based on multilateral rules or globally harmonized financial regulation standards, says IMF's research director, Maury Obstfeld. "But a broader rejection of a multilateral approach can lead to protectionism, and a race of concessions in the field of financial supervision in order to gain competitive advantages - to a fight of everyone against everyone, as a result of which situation in all countries will deteriorate", he concludes.


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