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Monday, April 22, 2024 | Back issues
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‘Made in America’ boast will get a bit more challenging to make

A newly announced rule change raises the bar for manufacturers to bill their goods as American made.

WASHINGTON (CN) — President Joe Biden unveiled new rules Friday that will more closely scrutinize where the creation of components in a product labeled "Made in America" occurred, a move the White House says will bolster domestic manufacturing as more companies announce plans for U.S. factory jobs.

Federal standards currently require so-called American-made products to have 55% of their components manufactured in the United States, but Biden says this bar does little to encourage investments in American production.

Under new rules his administration is ironing out, that threshold would be raised to 60% this year, 65% in 2024 and reach a peak of 75% in 2029.

"We're going to buy American, buying American products to support American jobs," Biden said.

Another alteration to existing federal rules will let the government put steeper price preferences on products and components that are considered critical to the supply chain. Price preferences are the percent increase the government is willing to pay to obtain certain types of goods and are a means of encouraging federal contractors to work with small businesses and American products.

Biden also touted a new commitment by Siemens USA, a technology company that produces electronic parts used in electric vehicle chargers, data centers and industrial sites, to invest $54 million to expand its domestic production.

The expansion will create 300 manufacturing jobs at Siemens facilities in California and Texas. Siemens also plans to open a new facility that will manufacture charging stations for electrical vehicles.The location of that factory has not been decided on yet.

"Folks, a new era for manufacturing is now taking shape in America," Barbara Humpton, president and CEO of Siemens USA, said Friday.

The announcements from the White House came the same day as the monthly jobs report, which noted a massive 678,000 jobs created last month and the lowest unemployment rate seen so far amid the Covid-19 pandemic. Of those new jobs created in February, 36,000 were in manufacturing.

"What we've seen in the past month is more reason why we need to reject the defeatist view that automation and globalization mean we can't have good paying union jobs, manufacturing here in America. Our manufacturing future, our economic future, our solutions to the climate crisis, they're all going to be made in America," Biden said.

Several companies have unveiled commitments to expand factory and manufacturing investments in the U.S. over the past few months.

General Motors, Boeing and Qatar Airways Group have all announced massive investments in domestic production.

Semiconductor producer and technology giant Intel is planning to open a factory outside Columbus, Ohio, to manufacture circuits and semiconductors — small chips critical used in everything from computers to cars and appliances.

The economic importance of semiconductors became clear when the Covid-19 pandemic hit the already overwhelmed industry, and delays in the supply chain catalyzed calls for domestic production of key manufacturing components.

"We invented the semiconductor and we hadn't been making them in America for a long time. We had to import them, we had to wait, they cost more," Biden said.

The $20 million investment was celebrated by Biden in his State of the Union on Tuesday, where he noted that Intel is looking to invest upwards of $100 million in multiple production sites in the U.S. if Congress passes legislation investing in American semiconductor production.

"That would be one of the biggest investments in manufacturing in American history. And all they’re waiting for is for you to pass this bill. So let’s not wait any longer. Send it to my desk. I’ll sign it. And we will really take off," Biden said during the State of the Union.

Both chambers of Congress passed bills aimed at countering China's control of the global manufacturing market and investing in domestic semiconductor manufacturing, but differences between the bills passed in the House and the Senate has stalled the legislation from becoming law.

Lawmakers now need to resolve the differences between the two bills.

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Categories / Business, Economy, Government, National

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