President Joe Biden has signed an executive order that strengthens the existing Buy American rules by closing loopholes and reducing waivers granted on federal purchases of US-made goods to ensure that American manufacturing is part of the engine of the country's prosperity.
Biden, who signed the executive order on Monday, six days after being sworn in, also ordered the creation of a new post at the White House.
He said the Director of Made in America at the White House Office of Management and Budget will oversee the all-of-government Made in America initiative.
“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 II, and it must be part of the engine of American prosperity now. That means we are going to use taxpayers’ money to rebuild America. We’ll buy American products and support American jobs, union jobs,” Biden during an event at the White House event.
Biden said the federal government every year spends approximately USD 600 billion in government procurement to keep the country going safe and secure.
He said that there's a law that's been on the books for almost a century now: to make sure that taxpayers’ dollars for procurement are spent to support American jobs and American businesses.
Biden alleged that the previous administration didn't take it seriously enough and the federal agencies waived the Buy American requirement without much pushback at all.
Big corporations and special interests have long fought for loopholes to redirect American taxpayers’ dollars to foreign companies where the products are being made. The result: tens of billions of American taxpayers’ dollars supporting foreign jobs and foreign industries, he said.
In 2018, he said, the Defence Department spent USD 3 billion on foreign construction contracts, leaving American steel and iron out in the cold.
“It spent nearly USD 300 million in foreign engines and on vehicles instead of buying American vehicles and engines from American companies, putting Americans to work,” he said as millions of Americans remained unemployed amidst the raging coronavirus pandemic.
The executive order signed on Monday aims to tighten the existing Buy American policies and go further.
“We're setting clear directives and clear explanations. We're going to get to the core issue with a centralised, coordinated effort,” he said.
That starts with stopping federal agencies from waiving Buy American requirements with impunity, as has been going on.
If an agency wants to issue a waiver to say “We're not going to buy an American product as part of this project; we're going to buy a foreign product,” they have to come to the White House and explain it, he said.
These waivers would be publicly posted.
Biden directed the Office of Management and Budget to review waivers to make sure they are only used in very limited circumstances.
“For example, when there's overwhelming national security, humanitarian, or emergency need here in America.
"This hasn't happened before. It will happen now,” he said.
Biden said that under the Build Back Better Recovery plan his administration will invest hundreds of billions of dollars in buying American products and materials to modernise infrastructure and competitive strength will increase in a competitive world.
That means millions of good-paying jobs, using American-made steel and technology, to rebuild roads, bridges, ports, and to make them more climate-resilient, as well as making them able to move faster and cheaper and cleaner to transport American-made goods across the country and around the world, making the US more competitive.
“It also means replenishing our stockpiles to enhance our national security. As this pandemic has made clear, we can never again be in a position where we have to rely on a foreign country that doesn't share our interest in order to protect our people during a national emergency.
"We need to make our own protective equipment, essential products and supplies. And we''ll work with our allies to make sure they have resilient supply chains as well,” Biden said.
Biden said that the executive action will not only require that companies make more of their components in America, but that the value of those components is contributing to the economy, measured by things like a number of American jobs created and/or supported.
“At the same time, we''ll be committed to working with our trading partners to modernise international trade rules, including those relating to government procurement, to make sure we can all use our taxpayer dollars to spur investment that promotes growth and resilient supply chains,” Biden said.
Shortly after taking office in 2017, Biden's predecessor, Donald Trump issued a series of executive orders that were aimed to strengthen rules requiring federal agencies to buy US-made goods when possible. But critics argued that effort fell short, partly because of Trump’s failure to adequately enforce the rules.