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Study: 'Buy America' Imposes Costly Burdens on Metro and Other Transit Agencies

Transit agencies across the country are shouldering higher infrastructure costs that strain budgets and make the systems more expensive overall than their overseas counterparts - and "Buy America" is a likely driver of those expenses, a right-leaning think tank says.

For example, Metro could have saved nearly a half-billion dollars on its 7000-series rail cars if it paid the same prices as transit systems overseas, and Buy America policies that mandate rolling stock be made in the United States might be to blame, a new study from the center-right American Action Forum says.

The U.S. Department of Transportation hails Buy America policies as drivers of economic growth, saying the regulations ensure large transit products support “an entire supply chain of American companies and their employees.”

President Trump has endorsed Buy America, most recently through an executive order, praising the policies for spurring economic growth and creating jobs. The Federal Transit Administration’s Buy America regulations, part of the 1982 Surface Transportation Assistance Act, stipulate that federal transit funds must be used toward products made in the United States, with few exceptions. Further, at least 60 percent of components for transit vehicles must be from American sources, and the requirement will soon increase to 70 percent under the Fixing America’s Surface Transportation Act.

But a recent analysis from the nonprofit group decries the same restrictions as a costly burden on U.S. infrastructure, saying the benefits of lifting such policies would likely outweigh the economic costs. For example, the study says, the average U.S. subway car costs $2.75m, while rolling stock in foreign countries costs about $2.09m, a difference of $700,000 or about 34 percent. In its study, AAF illustrated how rolling stock in five U.S. cities costs more, on overage, than in 14 cities overseas — though Buy America isn’t definitively pinned as the culprit.

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