President Joe Biden will take steps Monday to harness the purchasing power of the United States government, the world’s largest single buyer, to increase domestic production and create markets for new technologies, a senior official said.
Biden will sign executive order to close loopholes in existing “Buy American” provisions, which will structure the $ 600 billion worth of goods and services the federal government buys each year, make any exemptions more transparent and a higher role in the White House create to oversee the process
Increasing US production, a central premise of Biden’s presidential campaign, has proven to be a tedious challenge to previous governments, including that of former President Donald Trump.
Lower wages and weaker environmental standards have led to the exodus of important manufacturing capabilities to China and other countries, including medical equipment, to China and other countries in recent decades, leaving critical gaps emerging during the COVID-19 pandemic.
China overtook the United States as the world’s best manufacturer in 2010 and was responsible for 28% of global production in 2018, according to United Nations data.
Rebuilding critical supply chains and developing new ones is critical to growth in the US, trade experts say.
The US trade deficit spiked to $ 68 billion in November, its highest level in 14 years, as companies rushed to stock shelves with foreign goods and supply domestic factories that depended on foreign parts, driving a surge in exports. compensated.
“The US spends about $ 600 billion a year on contracts, and that’s money that … can also serve to revitalize our industrial strength and help create markets for new technologies,” the official said.
The injunction mandates federal agencies to re-evaluate the threshold used to determine U.S. content to prevent companies buying it from importing largely foreign-made goods and selling them as U.S.-made products after only minor adjustments.
It sets a deadline of 180 days for regulators to finalize the proposed changes, and commissions a new website to ensure transparency on any exemptions granted. The official did not provide new percentages for required US content and said these would be determined as a result of the process launched on Monday.
The move is part of Biden’s broader push to boost wages, create more union jobs and strengthen supply chains in the US, the official said.
“He does not accept the defeatist idea that automation and globalization mean that we cannot have well-paid union jobs here in America,” the official said.
The challenge of buying more US-made goods is in part a reflection of the erosion of many basic industries. Major US retailers, including Wal-Mart, have launched high-profile “Made in America” campaigns, then suing foreign manufacturers to get the goods consumers wanted. In 2015, the retailer faced an investigation by the Federal Trade Commission into the labeling of products that were only partially made in the country.
Business groups have defeated Trump administration pressure https://www.reuters.com/article/us-health-coronavirus-usa/us-business-groups-warn-buy-america-order-would-harm-pandemic- response-idUSKBN21D1SM to extend “Buy American” mandates to medical devices and pharmaceuticals, warning that they could exacerbate shortages during the pandemic.
Asked whether the order would be considered protectionist, the official said it was fully consistent with US obligations under the World Trade Organization. The White House hopes to work with trading partners to modernize global rules, he said.
The process starting Monday would “ensure that we use future procurement in a way that actually builds domestic capacity, especially in those areas where we have acute economic or national security needs and vulnerabilities,” he said.