Final answer:
The Buy America Act mandates that U.S. government agencies prefer U.S. products in contracts unless foreign products are significantly cheaper. This reflects protectionist policies which often arise during recessions.
Step-by-step explanation:
According to the Buy America Act, U.S. government agencies must give preference to U.S. products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage. During economic downturns, protectionist sentiments often rise, as was the case with the recession beginning in 2007 in the United States.
While high tariffs can protect domestic industries, they can also lead to increased monopoly power and can result in a system where firms may need to navigate complex permit systems or engage in corrupt practices for international trade opportunities.
This is despite international trade agreements that are designed to encourage free trade and can sometimes limit domestic protectionism, as seen through policies enacted by the World Trade Organization (WTO).