U.S. President Joe Biden will sign an executive order on Monday aimed at closing loopholes in existing "Buy American" provisions that structure the $600 billion in goods and services that the American federal government buys each year, making any waivers more transparent and
creating a senior White House role to oversee the process.
With the executive order, Biden is aiming to harness the purchasing power of the United States government, the world’s biggest single buyer, to increase domestic manufacturing and create markets for new technologies, a senior administration official said.
Increasing U.S. manufacturing was a central tenet of Biden’s presidential campaign and has proven a vexing challenge for previous administrations, including former President Donald Trump.
Lower wages and weaker environmental standards have triggered the exodus of key manufacturing capabilities to China and other countries in recent decades, including medical equipment, resulting in critical gaps laid bare during the COVID-19 pandemic.
China overtook the United States as the world’s top manufacturer in 2010 and was responsible for 28% of global output in 2018, according to United Nations data. Rebuilding critical supply chains and developing new ones is critical to U.S. growth.
The U.S. trade deficit surged to $68 billion in November, its highest level in 14 years, as businesses scrambled to fill shelves with foreign goods and supply domestic factories reliant on foreign parts, offsetting a rise in exports.
Biden’s new executive order directs federal agencies to re-evaluate the threshold used to determine U.S. content, to prevent companies it buys from importing largely foreign-made goods and selling them as U.S.-made after making just minor tweaks. It sets a deadline of 180 days for regulators to finalize changes once proposed and orders up a new website to ensure transparency about any waivers granted.
