New regulations would increase domestic content rules, and add unfair trade to waiver considerations.
President Biden signed an executive order on Monday that will begin a review of the Buy America rules that govern purchasing rules when the federal government goes shopping. In remarks to the press, he said the order was first part of his Build Back Better domestic economic agenda, which would put federal money toward infrastructure investment, supply chain resilience, and industrial research and development.
“I’ve long said that I don’t accept the defeatist view that the forces of automation and globalization can keep union jobs from growing here in America,” the president said in a brief speech before signing the document. “I don’t buy for one second that the vitality of American manufacturing is a thing of the past. American manufacturing was the Arsenal of Democracy in World War 2, and must be part of the engine of American prosperity now.”
The executive order Biden signed will scrutinize the waiver qualifications for existing federal Buy America laws, and creates a public database of contract exemptions with hopes of increasing competition from American manufacturers and suppliers. The order “also stipulates that more of a product’s components originate from U.S. factories, and hikes the government’s threshold of how much more can be paid to buy U.S. goods versus foreign products,” reports CBS News.
It also orders any government agency considering a waiver to a Buy America rule to first assess whether the cost advantage of a foreign-sourced product is the “result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods.” There are trade rules on the books by which the government can apply tariffs to imported products if they’re found to be traded unfairly. This executive order would therefore encourage cooperation between American trade and government procurement policies. That’s a good thing.
The rules Biden’s order is reviewing are immensely popular. The Buy America concept – giving preference to domestic manufacturers and workers when the government buys supplies or builds out public infrastructure – polls very well with voters across the political spectrum.
That’s why Buy America executive orders are not new. President Trump signed more than one of them during his time in office, but the reports and rules those orders were supposed to promulgate often didn’t materialize — and so the orders went nowhere.
Biden vowed that wouldn’t be the case again. The order creates a new position within the Office of Management and Budget to manage these reviews and rule changes, and it requires progress reports on implementation and ongoing waiver use. It would appear the Biden administration is taking this seriously. That’s good! It’s what he campaigned on!