I find the 'Buy American!' (or replace American with any other country) campaigns irrational and counter productive for several reasons.
Buying stuff from local people made sense a hundred of more years ago when helping out the neighbour with some business made him richer and this resulted in higher chances of him making a purchase of your products later on. This may still make some sense in developing regions of the world that are cut off from our global civilization.
But Today in our deeply interconnected and internationalized World buying stuff that was made in the country you hold a passport from makes little sense. Here are my three reasons why.
We live in a knowledge society
A person living far away from you may affect your life much more than your next door neighbour. For example, let's say you're an American. The kid in China whose father works in a factory that produces your purchased goods may one day work on a cancer drug that could literally save your life. Another kid few streets down from your house one day may bust your car even though you helped him by buying stuff from his dad's grocery store. Information respects no borders and new information is helpful to us no matter where it was generated.
Everything is connected
Company ownerships are extremely complicated and interconnected. It's entirely possible that a company that sells products that read MADE IN CANADA are owned by middle eastern investors. And the oil you supposedly buy from Saudi is actually produced by American companies. Most companies and brands in the world are owned by a multitude of nationalities directly or indirectly.
Even companies that are owned by a single individual get raw materials, various services and knowledge from other companies that are probably not owned fully by people of the same nationality. Every single corporation is incredibly international in the modern world. The 'MADE IN ...' is a meaningless marketing tool. The correct sticker that would apply to all products would be 'MADE ON EARTH'.
Just for the sake of the argument let's assume you will manage to make a purchase that only benefits a local merchant who only used local materials, services and knowledge. He may still go on vacation to another country or his son may buy a foreign vehicle. The money would still flow to other nations.
Even if the above argument do not apply to your purchase because it is a unique case, I still have one more argument against buying your country's products exclusively that will surely be relevant every time.
Trade is a tool for peace and wellbeing
There is no better tool to create peace between different cultures than trade. When people become more interdependent on each other because of trade there is a much higher chance they will not attack each other as it is in their best interest to keep the trade going making both parties better off. If for nothing else buy products from other countries to strengthen this interdependence.
Even if a given country is not a threat, consider the benefits of stabilizing and enriching a developing country by giving their people business. Less poverty means less overpopulation and less pollution. Making poorer places richer has strong positive feedback to everybody in the developed world. Also, the richer the people abroad the less likely your job will be exported as I argued in a previous post on the subject.
Any time in history a country tried to become self sufficient it lost the efficiencies of trade and division of labor. In result it became less wealthy than other trading nations. Whenever free trading was re-introduced it always produced greater well-being for all involved. The richest city states in the world all traded as freely as possible with all other nations without trying to buy their own stuff.
The only exception I can think of where buying local makes sense is fruits and vegetables for environmental and health reasons. Less shipping and shorter travel time generally results in a smaller carbon footprint and higher levels of micronutrients.
But even in this field consider that eating a variety of foods is important for optimal health. Also, consider that local inefficient small scale farming may have higher environmental impact than more efficient farming farther away even with transportation included. We also know from a recent research that freshly picked and quickly frozen foods are often nutritionally better than supposedly fresh foods that we find in supermarkets. Locality is not the only variable in the formula that determines what's the most ethical, healthy or economically beneficial for us to buy.
All humans came from a single tribe in Africa and spread out all around the world in the last few hundred thousand years. We're all one family of brothers and sisters. I think we should embrace the idea that we're all citizens of the World rather than citizens of a single country. Let's start to slowly kick the tribal thinking that benefited us for a long time because it became obsolete and counter productive in the modern World. Let's leave nationalism out of our buying decisions.
Image: Liberty Foundation. See the full campaign