WASHINGTON (CN) — President Joe Biden visited a Mack Trucks factory Wednesday to announce a higher domestic-component threshold for U.S.-made products that the federal government purchases with taxpayer dollars.
From the current minimum that says 55% of an item’s components must domestically made, the “Buy American” rule on federal acquisitions will shift immediately to 60% and gradually ramp up by 2029 to 75%. Details of the change are laid out in a fact sheet published ahead of Biden's announcement.
The White House in April established the Made in America Office, a priority laid out in January via an executive order targeting the U.S. economy and bolstering its supply chains. The office’s primary function is to strengthen U.S. manufacturing by enforcing federal procurement rules more effectively.
Presently, federal contractors are required only to assert rather than prove that they have met the 55% requirement.
The rule proposed Wednesday would create an all new reporting requirement for what the White House deems “critical products” and would force contractors to disclose exactly how much of their item was made in America.
“More complete and accurate data would be used to target future improvements to support America’s entrepreneurs, farmers, ranchers, and workers and along the way, create good jobs and resilient communities,” the White House fact sheet states.
Speaking this afternoon in Lehigh Valley, Pennsylvania, at Mack's enormous assembly plant, Biden lamented how many American companies have effectively been cut out of manufacturing deals because of waivers granted without reporting requirements as part of the deal.
“If you’re going to give an exception," he said, "you have to tell the White House why specifically. And if they still want a waiver, they have to post the request publicly so American manufacturers have a chance to look it up. … And the company can say, we make that and they can’t take the job overseas.
Biden added: “There’s a new sheriff in town, we’re going to be checking. I’m serious. I am deadly earnest.”
The U.S. government snapped up about $600 billion in goods last year, an increase of about $70 billion from the year before. In 2021 alone, agencies including the Department of Defense, the Department of Energy and NASA have announced about $2 billion in new purchases of domestic or mostly domestic made products or technologies.
That includes the Energy Department’s purchase of an electric vehicle fleet as well as equipment to handle and isolate hazardous materials at large manufacturing plants in Texas, Iowa, South Carolina, Wisconsin, Connecticut, Louisiana, Idaho and Ohio.
The Army Corps of Engineers for the Mississippi Valley also doled out $42 million this year in new contracts for projects that are aimed at making the region more storm and flood resistant. This will be essential for the waterway since it sees over 175 million tons of freight each year, according to the National Park Service.
To stabilize American supply chains for critical goods — like semiconductors and medical equipment, which that became scarce as the Covid-19 pandemic set in — new price preferences will also be applied. Once those new preferences are in place, it will create a stable of domestically produced goods for the long term.
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