On Jan. 25, President Joe Biden issued an executive order on Ensuring the Future Is Made in All of America by All of America’s Workers.
The order is part of his “Build Back Better Recovery Plan” to strengthen American manufacturing and has potentially far-reaching effect. The order will tighten the federal government’s requirements to buy American products, support American jobs and rationalize the enforcement of the country’s patchwork of “Made in America” laws.
Companies that supply goods and services to the federal government may no longer benefit from statutes like “Buy American.” The Jan. 25 order will tighten agencies’ purchasing by increasing domestic content requirements and close loopholes for determining country of origin under Made in America laws.
Companies that benefit from domestic preferences now must re-examine whether they will continue to benefit under the proposed new regulations. Contractors and subcontractors will need to closely monitor developments to implement the order to ensure compliance and maximize their ability to continue benefiting from these preferences.
The federal government spends some $600 billion annually on goods and services. Federal law requires government agencies to give preferences to American firms.
In the past, Buy American requirements have not been consistently enforced and waivers of the requirements have become common. The executive order aims to “strengthen and enforce ‘Buy American’ so that the massive amount of taxpayer money the federal government spends every year on everything from defense equipment to steel to auto fleets is used to help American manufacturers and their workers.”
Among other things, the executive order will close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences. Federal agencies are directed to...