Our 2015 paper studied public procurement of transit buses. Such buses are the buses that urbanites (including me on the #8 and #12) ride around cities. Our puzzle in our paper is that Singapore, China, South Korea, and Japan produce buses that are more fuel efficient than U.S buses and the market price of these buses is 50% lower than the price of U.S buses. In our paper we argue that cities in the U.S do not import these buses because the cities pay for their bus purchases using Federal subsidies and thus face the "Buy America" strings. Domestic bus makers know that they are shielded from foreign competition and they raise their prices for buses that may be of lower quality. Trade frictions have consequences!
In 2015, I co-authored a paper about the consequences of "Buy America" legislation. Now that I see that President Trump will require "Buy America" (see the pipeline case study) our paper offers some insights about the near future. For details about "Buy America" click here.