Some consumers prefer to buy domestically-made products rather than foreign ones, due to a personally held belief in economic nationalism. That’s their choice, and this sort of “personal protectionism” — prohibiting themselves from buying foreign products, in a sense — should not be equated with government intervention in the market, through tariffs or similar measures, to push people towards buying domestic products.

Sometimes the government tries to push in a more subtle manner than tariffs, taking advantage of people’s personal preferences by requiring that the country of origin of a product be identified so that consumers can more easily engage in their personal protectionism. This type of measure can be constructed in a way that is intended to directly raise the costs of selling foreign products, and in that way helping domestic competitors, as my colleague Inu Manak and I wrote about with regard to beef labeling here. But in other cases, it may have less of an impact. The measure requires the label, which does have an overall cost for producers, but other than that simply leaves it up to consumers to decide what to do.

The same concept may now be coming to online sales, where a piece of Congressional legislation that has been put forward “would require online sellers to clearly state where their products are made.” This type of legislation tends to be pushed by domestic industries who are looking for ways to limit competition with foreign products.

I don’t think this legislation is necessary, as consumers who care about the geographic origin of their products have plenty of options, both online and offline, for buying products that identify the location of production. And companies who produce domestically can and do advertise that, presumably using this information to gain sales at the expense of their foreign competitors.

However, if this kind of law is going to be enacted, and I can see how political forces are pushing in that direction, my recommendation is to introduce some flexibility here. Sometimes a company might offer a product from multiple sources, for example, a particular set of t‐​shirts could come from both Viet Nam and Indonesia. In these situations, the law should allow the company to advertise the product as coming from one of several listed countries. Forcing companies to identify the specific country for each individual product sold would be extremely burdensome. Inu and I suggested something similar in the case of beef labeling.

Origin labeling provided voluntarily by producers is fine, of course. But if the government gets involved, and tries to require this labeling through laws that impose a cost that is ultimately borne by consumers, at the least it should be done with some flexibility rather than in the most protectionist way possible.