Assessing the Impact of U.S. Economic Nationalist Policies on Department of Defense Contracting Patterns

Abstract

In recent years, the U.S. government has implemented a series of economic nationalist policies to bolster domestic manufacturing and reduce reliance on foreign suppliers in support of national defense. These efforts, particularly within the Department of Defense (DoD), are intended to enhance supply chain resilience and strengthen the defense industrial base. However, it remains unclear whether such policies have resulted in measurable shifts in DoD contracting behavior, especially in terms of awarding contracts to U.S.-based manufacturers. This study addresses this knowledge gap by analyzing trends in DoD manufacturing contracts from 2008 to 2024, evaluating the impact of these policies on procurement outcomes, and assessing their alignment with broader national security objectives. The findings indicate that while domestic sourcing remained consistently high across the period of analysis, recent domestic preference initiatives primarily influenced the composition of contract awards rather than the overall distribution of procurement spending. As a result, procurement outcomes only partially align with national security goals to reduce foreign reliance, suggesting that sustained progress will require reinforcing procurement preferences with long-term industrial investment, supply chain transparency, and capability development.