Biden Pushes Elusive ‘Buy American’ Goal With New Federal Contract Guidelines

WASHINGTON (Reuters) — President Joe Biden will take steps on Monday to harness the buying energy of the United States authorities, the world’s largest single purchaser, to extend home manufacturing and create markets for brand new applied sciences, a senior administration official mentioned.

Biden will signal an govt order geared toward closing loopholes in current “Buy American” provisions, which construction the $600 billion in items and companies the federal authorities buys annually, making any waivers extra clear, and making a senior White House function to supervise the method.

Increasing U.S. manufacturing, a central tenet of Biden’s presidential marketing campaign, has confirmed a vexing problem for earlier administrations, including that of former President Donald Trump.

Lower wages and weaker environmental requirements have triggered the exodus of key manufacturing capabilities to China and different international locations in latest many years, together with medical gear, leading to crucial gaps laid naked through the COVID-19 pandemic.

China overtook the United States because the world’s prime producer in 2010, and was liable for 28% of worldwide output in 2018, based on United Nations information.

Rebuilding crucial provide chains and growing new ones is crucial to U.S. progress, commerce specialists say.

The U.S. commerce deficit surged to $68 billion in November, its highest stage in 14 years, as companies scrambled to fill cabinets with overseas items and provide home factories reliant on overseas elements, offsetting an increase in exports.

“The U.S. spends about $600 billion a year on contracts, and that is money that…can also serve to spur a revitalization of our industrial strength and help to create markets for new technologies,” the official mentioned.

The order directs federal businesses to reevaluate the brink used to find out U.S. content material, to forestall firms it buys from importing largely foreign-made items and promoting them as U.S.-made after making simply minor tweaks.

It units a deadline of 180 days for regulators to finalize modifications as soon as proposed, and orders up a brand new web site to make sure transparency about any waivers granted. The official gave no new percentages for required U.S. content material, saying they might be decided because of the method being launched on Monday.

The transfer is a part of Biden’s broader push to drive up wages, create extra union jobs and strengthen U.S. provide chains, the official mentioned.

“He does not accept the defeatist idea that automation, globalization mean that we can’t have good-paying union jobs here in America,” the official mentioned.

The problem in shopping for extra U.S.-made items is partly a mirrored image of the erosion of many fundamental industries. Major U.S. retailers, together with Wal-Mart, have launched excessive profile “Made in America” campaigns, solely to court docket overseas producers afterward to get the products shoppers needed. In 2015, the retailer confronted a probe by the Federal Trade Commission for labeling merchandise that had been solely partly made within the nation.

Business teams blasted the Trump administration’s push to broaden “Buy American” mandates to the medical gear and pharmaceutical sectors, warning they may worsen shortages through the pandemic.

Asked if the order can be seen as protectionist, the official mentioned it was totally in line with U.S. commitments below the World Trade Organization. The White House hopes to work with commerce companions to modernize world guidelines, he mentioned.

The course of starting Monday would “make sure that we are using procurement going forward in a way that actually builds domestic capacity, particularly in those areas where we have acute economic or national security needs and vulnerabilities,” he mentioned.

(Reporting by Andrea Shalal and Timothy Aeppel; Additional reporting by Nandita Bose; Editing by Heather Timmons and Jacqueline Wong)