President Joe Biden on Wednesday proposed strengthening the federal government’s Buy American rules in an attempt to boost American manufacturing.
According to the White House’s fact sheet, the new proposal would require goods bought with taxpayer money to contain 75% US-made content. This is an increase from the current 55%.
The President will promote the proposal on Wednesday when he visits Lower Macungie Township in Pennsylvania. According to the White House, the President will visit a Mack Truck factory and give remarks about the importance of American manufacturing.
According to the White House, the proposal would encourage the development and expansion of domestic supply chains for critical goods by setting new price preferences as well as increasing transparency and accountability under the Buy American rules.
The federal government is a significant buyer in many markets for goods or services, including the largest consumer of consumer goods worldwide. One official from the administration said that the key to Biden’s industrial strategy is to leverage this purchasing power to influence markets and foster innovation.
The White House calls the proposed rule “the most robust change to the implementation” of the Buy American Act for almost 70 years. This comes after a 180-day interagency review that began shortly after Biden signed an executive directive.
The new rule proposes that domestic content thresholds be increased to 60%, 65%, and 75% respectively by January 2024. Officials stated that the gradual increase would give businesses enough time to adjust their supply chains to increase American-made components.
The proposed rule will also address supply chain problems caused by the coronavirus epidemic by granting price preferences for certain critical products and components that were identified in the critical supply chain review conducted by the administration.
The official said that the new rule would increase transparency and accountability regarding domestic content rules.
“New reporting requirements will improve data about the domestic content of federal purchases through new components and products. The official stated that this will improve compliance with existing laws and give policymakers more data to enable future rulemaking to enhance Buy America’s ability to support workers, businesses, and communities throughout America.
The official said that the rule was the result of a “rigorous” interagency process, which included over a dozen roundtables with small business associations and labor unions.
The official stated that it was the first of the proposed reforms to the procurement policy in the Biden-Harris administration. It is meant to protect taxpayer dollars, increase American businesses’ competitiveness in strategic industries, and ensure America’s workers’ well-being.
Before the administration issues its final rule, the rule will be made public with a 60-day comment period.
Officials from the Administration stressed that the White House had already increased the number of American products it purchased before the new rule was published. This is a total of more than $2B in new purchases to help support American manufacturing of new technologies.