Biden’s new executive order to push ‘Buy American’ agenda. What does that mean?
President Joe Biden will sign an executive order Monday to promote “Buy American” rules — seeking to boost U.S. manufacturing through federal procurement.
Biden has signed a slew of executive orders since taking office Wednesday, some of which have been aimed at rolling back policies implemented under former President Donald Trump. He has used executive actions to address the coronavirus pandemic, racial and LGBTQ equity, immigration issues, environmental issues and others.
The president is expected to sign additional orders this week, CNN reports.
His Monday executive order aims to strengthen requirements surrounding the federal government’s purchasing of American-made goods, according to the White House. Here’s what to know.
What is “Buy American?”
Signed in 1933, the Buy American Act requires federal agencies to “procure domestic materials and products,” with several exceptions. It’s meant to limit the purchasing of foreign-made products and materials and requires price preferences for American-made goods, according to the Congressional Research Service.
But for the act to apply, the materials and products must be intended “for public use within the United States” and “the items to be procured or the materials from which they are manufactured must be present in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality.”
Exceptions apply if the act is “inconsistent with the public interest” or if the cost is “unreasonable.”
During his campaign, Biden outlined a plan to strengthen “Buy American” provisions — saying the U.S. has “never fully lived up” to them and promising to invest $400 billion in American-made products.
“With this order, President Biden is ensuring that when the federal government spends taxpayer dollars they are spent on American made goods by American workers and with American-made component parts,” a White House release about the Monday executive order says.
What will the executive order do?
Biden’s order seeks to ensure the federal government is putting taxpayer money toward American businesses and to “close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences,” the release says.
The order will direct agencies to close those loopholes on “how domestic content is measured” and to increase requirements on domestic products.
“Existing Buy American rules establish a domestic content threshold — the amount of a product that must be made in the U.S. for a purchase to qualify under Buy American law,” the release says. “This executive order directs an increase in both the threshold and the price preferences for domestic goods — the difference in price over which government can by a product from a non-US supplier.”
The order will appoint a Director of Made-in-America at the Office of Management and Budget who will oversee its implementation, and it will create a “central review” of Buy American waivers given to agencies, which will be made available to the public online.
The order also reemphasizes Biden’s support for the Jones Act, a law which requires that “only U.S.-flag vessels carry cargo between U.S. ports.” Additionally, agencies will be required to report on their implementation of the Buy American laws biannually.
“President Biden’s executive action will ensure that the federal government is investing taxpayer dollars in American businesses—both small and large,” the release says. “These investments will help create well-paid, union jobs and build our economy back better so that everybody has a fair shot at the middle class.”
Canadian leaders have expressed concern about Biden’s planned executive order potentially harming the country’s trade relationship with the U.S., Bloomberg reports. Their concern comes days after Biden revoked the permit for the Keystone XL pipeline, which would have moved crude oil from Canada to Nebraska.
“Obviously, if we see that there can be cases where there is damage done to our trade because of Buy America policy, we will speak up,” Marc Garneau, Canada’s foreign minister, told CBC News. “President Biden has indicated that he is open to hearing from us whenever we feel concerned.”
This story was originally published January 25, 2021 at 10:27 AM with the headline "Biden’s new executive order to push ‘Buy American’ agenda. What does that mean?."
