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EM – 1/24/17: Regarding Construction of American Pipelines

By Tom Milligan

Within hours of issuing Executive Memorandums to expedite the construction of the Dakota Access Pipeline and the approval for the Keystone XL Pipeline, President Trump issued this new Memorandum which, at its core, simply says “buy American.”

In this Memorandum, President Trump instructs the Secretary of Commerce – within 180 days – to develop and submit a plan in which all new or renovated pipelines in the United States are built or repaired using goods and materials produced in the United States.

Sounds good.  Buy American.

My first question – as always – is whether or not the President has the authority to issue an edict like this?  

Can the President actually force a company contracted to build a pipeline to only buy American materials?

Asked in a different context; what if President Trump ordered Apple to build iPhones using components produced only in the United States?

If he did that, could he also prohibit Ford from importing Mustang parts from Mexico?

Where does his power end?

The answer is that he can’t really force Apple or Ford to buy only American-produced parts or components.  He can, however, make importing those parts less attractive (i.e. more expensive) by imposing tariffs on those imported components.  

Trump’s threatened tariffs would increase the price of the imported materials needed to build iPhones and Mustangs to the point that it may make sense to build them here anyway.  

Now before you say, “See! The tariffs will force us to buy American!” try to understand that the only reason the tariffs would make Ford or Apple buy from US suppliers is because it’s slightly cheaper than buying from Mexico or China.  

But that doesn’t mean it’s cheaper for the consumer.

So he can’t prohibit Apple or Ford, but with regards to pipelines, he has more than just tariffs in his bag of tricks.

You see, for any interstate or international pipeline within the United States to be built or renovated, the owner or operator of the pipeline must seek and receive approval from the Federal Energy Regulatory Commission (FERC).  Despite the fact that FERC is a self-funded organization that claims to be independent, it is ultimately a part of the Department of Energy now run by the immensely unqualified Rick Perry who owes his job to Donald Trump.

So here’s how this will probably play out…

Some poor, unsuspecting contractor will bid on a project to repair a pipeline using his known suppliers/prices.  Then FERC, under the direction of Trump’s stooge Perry will withhold approval until they agree to buy according to Trump’s new edict, which may or may not have been taken into account when they won the bid.  

But now they’re stuck.  

They’re contractually obligated to repair the pipeline, but their costs have just gone way up.  

They can’t afford to perform the work they’re obligated to perform, so their only option is to declare bankruptcy and layoff their workers.

Talk about unintended consequences!

I know most Trumpers will still get all excited that their President is so fixated on buying American, but let’s face it:

Despite the patriotic brouhaha surrounding it, Trump’s own foreign purchasing habits weaken this Memorandum to the point of nothingness.

Trump’s ugly ties and shirts are manufactured in Mexico and China and his daughter’s line of cheap knockoffs are manufactured in China.

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Just yesterday, our President bashed Seattle-based Nordstrom for dropping Ivanka’s line made in China.  Then Trump’s mouthpiece, Kellyanne Conway, went on national television and asked all of us to buy Ivanka’s chinese-made shit.

“America First” my ass!


I’m all for buying American.  I think the idea that Trump wants all of us to buy American goods is good and patriotic.

I also believe that imposing government control over the purchasing decisions of private companies is NOT a conservative principle.

If Donald Trump wants to encourage – or force – Americans to buy American goods, then he should support a boycott of his and Ivanka’s products until such time they onshore the manufacturing.

I’ll close with the ironic final words of Trump’s “America First” policy:

…we can bring jobs back to America’s shores, increase wages, and support U.S. manufacturing.”

What a joke!

Click here to read my reviews on other Executive Actions & Orders

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