VectorCal
Q1 Answer
Buy American Act is a provision that governs the supplies or contracts that the Federal Government pays or funds. The provision is applicable in construction and maintenance of public buildings. It stipulates that such products need to originate from U.S. In other words the law allows only the firms in the United States to manufacture and supply such products. It is a provision that puts the foreign nations out of the business transaction. In most cases it, this law is most applicable for steel and iron products (Knapp, 1961).
On the other hand, the provision gives the U.S. manufacturers permission to sought new technologies from foreign nations for the advancement of their products and services. It does not limit the investors from adopting good strategies adopted by other nations. As a matter of fact, the provision seeks to protect local manufacturers and ensure public interest for its citizens. It leads to enhanced stability of the nation’s stability and economic growth.
However, there are some exceptions to which these provisions do not apply. For instance, it does not apply when the supplies are for the public interest. It gives public interest a big priority thus making it inconsistent under such circumstances. Besides, the provision does not apply in case the supplies are cheaper than those produced in the United States. It allows such exemption if those products manufactured in U.S. are deemed to raise the cost of a project with more than 25% (Ingham, 2008). Finally, the provision does not apply if the nation cannot manufacture enough of the required products. In all these circumstances the Act allows other foreign firms to provide the supply of the materials required.
Q2 Answer
The Buy American Act exceptions are fair and advantageous to the economy of United States. It is important to note that absence of key products is detrimental to economic growth. The requirements of the Act allow foreign nations to supply materials meant of iron and steel in circumstances where the U.S. manufacturers cannot meet the required quantities. Such a move is vital for the nation in ensuring that whatever materials for its production and development are available. This enhances the economic development of the U.S. because it produces with or without enough materials.
Also, the exception of the Act helps the public enjoy their interests. The Act allows the public to request for those products that they have interest from foreign investors. Although it prohibits the supply of materials for construction and maintenance from foreign investors this provision is inconsistent when it comes to public interest. It is a fair and advantageous to the citizens since it helps them enhance their living standards. A nation with satisfied citizens has a stable and developed economy.
Finally, the exception of the law helps United Nations of America to reduce costs of production. The Act allows the supply and iron and steel materials by the foreign investors in the event where those produced in the nation seem expensive. In circumstances where such materials may raise the cost of the project by more than 25% the provision allows cheaper sources from other nations to offer supplies (Knapp, 1961). It is a good move in ensuring that the government’s projects are economical. It is a better way of reducing expenditure for the government. Reduction of expenditure leads to enhanced economic growth for the nation.
The Act requirements are contradictory to capitalistic ethos in its provisions. Ingham (2008) reveals that capitalism has much to do with private ownership and seeks to earn profits from the business transactions. However, the Act requirements seek to for the American manufacturers to offer a supply of iron and steel materials funded by the Federal government for construction. Capitalist ethos requires competition of firms in the international market to enhance quality.
Besides, the law allows the U.S. manufacturers to gather new technology from other foreign nations but not share the products. Such a move is contradictory to the free market ethos since it is the nation which benefits while other world nations do not benefit. Capitalist ethos supports the sharing of business ideas and exchange of products and services among the world nations. However, the Act requirement does not support this strategy. Instead, it seeks to benefit itself and discourage other nations from enjoying business transactions in a free market (Ingham, 2008).
Q4 Answer
Buy American Act is of great benefit to both upstart and VectorCal companies. In a way, the act limits competition of U.S. companies in the international markets. The application of the law for the two companies implies that these companies will face minimal competition from other nations’ countries that provide same products. They will enjoy more economies of scale in the nation not to mention their growth and development.
Besides, the companies will enjoy the use of foreign technology without any limitations from the law. As a matter of fact, the act allows investors to make use of advanced technologies from other nations to foster growth and development of the economy. As the companies develop the United States economy, they will also enjoy the stability in the nation and take advantage of other economies of scale such as high revenues. Also, the two companies will enjoy a stable business environment since once currency is involved. Involvement of other world’s companies in the supply of these products will lead to fluctuations in the currency due to different foreign currencies used.
The two companies use sophisticated technology to manufacture U.S. defense navigation systems, the act gives the two companies an added advantage in the world ranking. The companies will receive higher ranking since with limited competition and less copying of excellent technologies in the U.S. High ranking is crucial in helping the both VectorCal and NAvPro Technologies Companies in building their reputation. Although the startup company focuses on providing supplies and manufacturer of navigation systems, it will also enjoy higher profits as compared to a state where the Act could allow other companies from different nations supply the same products.
Q4 Answer
Using the Act has various advantages to both the nation and its investors. First, the provision encourages the growth and development of the United States manufacturers. The Act limit international competition within the nation since it is only U.S. firms that have the mandate to offer the products as mentioned earlier. The U.S. firms get the opportunity to offer their products under limited competition thus helping them to enjoy the economies of scale.
Also, the provision helps in the stimulation of the nation’s economic growth. The manufacturers operate under a stable economic environment which is free from exchange rate fluctuations and interest rate fluctuations. They pay revenue to the nation thus helping it to stimulate economic growth. It is also a good way of strengthening the nation’s currency.
On the other hand, the provision discourages international trade. The law is a form of barrier to other world investors. The Act limits other foreign nations from supplying manufactured goods that are funded by the Federal government. This is one way of discouraging other investors from other world nations from transacting business with the United States. No exchange of goods and services thus hindering international trade (Connolly, 2011).
Furthermore, the Buy American Act may lead to poor quality products from its manufacturers. Since the provision limits competition, it makes local manufacturers inefficient in their production. Competition is an important tool in pushing companies to deliver quality products and excellent services to the nation. If competition does is not guaranteed, the monopoly of local companies may fail to provide quality products that are vital for better projects of the nation.
Moreover, failure to allow other foreign investors to supply the products may hinder creativity and innovation within the nation. Although the Act allows investors to seek new technology from other world nations, it is impractical for other nations to render their technological skills to the nation that does not allow them to invest in it. As a matter of fact, many nations fail to share the new technology with U.S. manufacturers due to that reason. This is a serious matter that may slow creativity and innovation in the U.S. since technology is a key driver. Sharing new technology comes easily if different nations of the world exchange goods and services (Connolly, 2011).
References
Connolly, S. (2011). International trade. Mankato, MN: Amicus.
Ingham, G. K. (2008). Capitalism. Cambridge, UK: Polity Press.
Knapp, L. A. (1961). The Buy American Act: A Review and Assessment. Columbia Law Review, 61(3), 430.
