Joe Biden toughens rules requiring the federal government to buy more American-made products
President Biden proposed on Wednesday raising the local content requirement for a product to be considered “made in the United States” when purchased by the federal government.
In what the White House hails as the biggest push to “Buy American Goods” in nearly 70 years, the proposal would require that at least 60% of a product’s components be produced domestically to qualify as “Made in the USA. “
That threshold would then be increased to 75% in incremental stages by 2029.
Biden also proposed changing the reporting requirements to force government contractors to disclose the percentage of local content in their products. Currently, contractors are only required to report to the government if they meet the content threshold.
The idea is that the rule change will strengthen the data on how many American components are used in goods purchased by the federal government.
The measures would also allow the US to beef up its national supply chain after the coronavirus pandemic exposed gaps that left healthcare workers scrambling for protective gear.
If approved, the proposal would apply to almost anything purchased by the federal government, from helicopter blades to office furniture.
By tightening local content rules, the Biden administration would give automakers a big boost as Biden has sought to replace the government fleet of nearly 650,000 cars and trucks with electric vehicles, one of its infrastructure package proposals. .
The federal government spends up to $ 600 billion a year on contracts, but a significant portion of that goes to foreign companies, said Public Citizen, a nonprofit watchdog organization.
It is unclear how many federal contracts go to foreign countries because some of the funds go to subsidiaries of US corporations abroad, Public Citizen said in a report earlier this year.
The United States government has been more receptive to foreign contractors than other nations, according to information from the General Accounting Office.
In 2010, the most recent year available, foreign companies bid for 48% of US government contracts, while the European Union, Japan, South Korea, Norway and Canada allowed only a combined 16% of the contracts were tendered by foreign companies.
An administration official told reporters in a background call that the proposed measures will ensure that US tax dollars help US companies compete.
The official said the changes “will accelerate innovation” for US companies.
“We will buy from all Americans, including minority entrepreneurs and businesses in all regions of our country, and we will create more union jobs,” the official said.
Shortly before leaving office, President Trump tightened the national content threshold. Trump raised the threshold to 55% for manufactured goods and 95% for iron and steel, up from 50% previously for all items.
It also increased how much more government agencies could pay for domestic products over foreign ones to give US manufacturers an advantage.
Trump had pushed for more aggressive provisions, but his plans hit a roadblock when other officials argued that his proposals could risk a backlash from foreign nations and increase costs for American taxpayers.
The Biden administration official dismissed concerns that they could also conflict with foreign business partners, saying the proposed changes will not affect products that do not meet Buy American rules.
Still, Biden has already faced foreign opposition to his previous Buy American initiatives.
In January, after he signed an executive order forcing the federal government to buy more American products, some allies raised concerns with the president. Canadian Prime Minister Justin Trudeau expressed concern over the loss of lucrative contracts in a phone call with Biden, according to media reports at the time.
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