Being a trade isolationist, that is, having the BUY USA to support local companies mindset may have zenophobic undertones, but it should be an economics debate. People and companies in the USA are better off through purchasing goods made through low priced labor overseas.
This is Economics 101...the great lesson made popular by Adam Smith that led to the Industrial Revolution, a revolution that advanced the western world to better living standards.
Some of you might enjoy this chapter below from Henry Hazlitt on this topic.
T H E D R I V E F O R E X P O R T S
Exceeded only by the pathological dread of imports
that affects all nations is a pathological yearning for exports.
Logically, it is true, nothing could be more inconsistent.
In the long run imports and exports must equal
each other (considering both in the broadest sense, which
includes such "invisible" items as tourist expenditures
and ocean freight charges). It is exports that pay for imports,
and vice versa. The greater exports we have, the
greater imports we must have, if we ever expect to get
paid. The smaller imports we have, the smaller exports
we can have. Without imports we can have no exports,
for foreigners will have no funds with which to buy our
goods. When we decide to cut down our imports, we are
in effect deciding also to cut down our exports. When we
decide to increase our exports, we are in effect deciding
also to increase our imports.
The reason for this is elementary. An American exporter
sells his goods to a British importer and is paid in
British pounds sterling. But he cannot use British pounds
to pay the wages of his workers, to buy his wife's clothes
or to buy theater tickets. For all these purposes he needs
American dollars. Therefore his British pounds are of no
use to him unless he either uses them himself to huy British
goods or sells them to some American importer who
wishes to use them to buy British goods. Whichever he
does, the transaction cannot be completed until the American
exports have been paid for by an equal amount of
imports.
The same situation would exist if the transaction had
been conducted in terms of American dollars instead of
British pounds. The British importer could not pay the
American exporter in dollars unless some previous British
exporter had built up a credit in dollars here as a result
of some previous sale to us. Foreign exchange, in
short, is a clearing transaction in which, in America, the
dollar debts of foreigners are cancelled against their dollar
credits. In England, the pound sterling debts of foreigners
are cancelled against their sterling credits.
There is no reason to go into the technical details of all
this, whichcan be found in any good textbook on foreign
exchange. But it should be pointed out that there is nothing
inherently mysterious about it (in spite of the mystery
in which it is so often wrapped), and that it does not
differ essentially from what happens in domestic trade.
Each of us must also sell something, even if for most of
us it is our own services rather than goods, in order to get
the purchasing power to buy. Domestic trade is also conducted
in the main by crossing off checks and other
claims against each other through clearing houses.
It is true that under an international gold standard
discrepancies in balances of imports and exports are
sometimes settled by shipments of gold. But they could
just as well be settled by shipments of cotton, steel,
whisky, perfume, or any other commodity. The chief
difference is that the demand for gold is almost indefinitely
expansible (partly because it is thought of and
accepted as a residual international "money" rather than
as just another commodity), and that nations do not put
artificial obstacles in the way of receiving gold as they
do in the way of receiving almost everything else. (On
the other hand, of late years they have taken to putting
more obstacles in the way of exporting gold than in the
way of exporting anything else: but that is another
story.)
Now the same people who can be clearheaded and
sensible when the subject is one of domestic trade can be
incredibly emotional and muddleheaded when it becomes
one of foreign trade. In the latter field they can seriously
advocate or acquiesce in principles which they
would think it insane to apply in domestic business. A
typical example is the belief that the government should
make huge loans to foreign countries for the sake of in-
creasing our exports, regardless of whether or not these
loans are likely to be repaid.
American citizens, of course, should be allowed to lend
their own funds abroad at their own risk. The government
should put no arbitrary barriers in the way of private
lending to countries with which we are at peace. We
should give generously, for humane reasons alone, to
peoples who are in great distress or in danger of starving.
But we ought always to know clearly what we are doing.
It is not wise to bestow charity on foreign peoples under
the impression that one is making a hardheaded business
transaction purely for one's own selfish purposes. That
could only lead to misunderstandings and bad relations
later.
Yet among the arguments put forward in favor of huge
foreign lending one fallacy is always sure to occupy a
prominent place. It runs like this. Even if half (or all)
the loans we make to foreign countries turn sour and are
not repaid, this nation will still be better off for having
made them, because they will give an enormous impetus
to our exports.
It should be immediately obvious that if the loans we
make to foreign countries to enable them to buy our
goods are not repaid, then we are giving the goods away.
A nation cannot grow rich by giving goods away. It can
only make itself poorer.
No one doubts this proposition when it is applied privately.
If an automobile company lends a man $1,000 to
buy a car priced at that amount, and the loan is not repaid,
the automobile company is not better off because it
has "sold" the car. It has simply lost the amount that it
cost to make the car. If the car cost $900 to make, and
only half the loan is repaid, then the company has lost
$900 minus $500, or a net amount of $400. It has not
made up in trade what it lost in bad loans.
If this proposition is so simple when applied to a private
company, why do apparently intelligent people get
confused about it when applied to a nation? The reason is
that the transaction must then he traced mentally through
a few more stages. One group may indeed make gainswhile
the rest of us take the losses.
It is true, for example, that persons engaged exclusively
or chiefly in export business might gain on net balance
as a result of bad loans made abroad. The national loss
on the transaction would be certain, but it might he distributed
in ways difficult to follow. The private lenders
would take their losses directly. The losses from government
lending would ultimately be paid out of increased
taxes imposed on everybody. But there would also be
many i n d i r e c t losses brought about by the effect on the
economy of these direct losses.
In the long run business and employment in America
would be hurt, not helped, by foreign loans that were not
repaid. For every extra dollar that foreign buyers had
with which to buy American goods, domestic buyers
would ultimately have one dollar less. Businesses that depend
on domestic trade would therefore be hurt in the
long run as much as export husinesses would he helped.
Even many concerns that did an export business would
be hurt on net balance. American automobile companies,
for example, sold about10 per cent of their output in
the foreign market before the war. It would not profit
them to double their sales abroad as a result of bad foreign
loans if they thereby lost, say, 20 per cent of their
American sales as the result of added taxes taken from
American buyers to make up for the unpaid foreign
loans.
None of this means, I repeat, that it is unwise to make
foreign loans, but simply that we cannot get rich by
making bad ones.
For the same reasons that it is stupid to give a false
stimulation to export trade by making bad loans or outright
gifts to foreign countries, it is stupid to give a false
stimulation to export trade through export subsidies.
Rather than repeat most of the previous argument, I leave
it to the reader to trace the effects of export subsidies as I
have traced the effects of bad loans. An export subsidy
is a clear case of giving the foreigner something for nothing,
by selling him goods for less than it costs us to make
them. It is another case of trying to get rich by giving
things away.
Bad loans and export subsidies are additional examples
of the error of looking only at the immediate effect of a
policy on special groups, and of not having the patience
or intelligence to trace the long-run effects of the policy
on everyone.