President Joe Biden has vowed to leverage the purchasing power of the U.S. government, the world’s biggest single buyer of goods and services, to strengthen domestic manufacturing and create markets for new technologies.
The executive order aims to close loopholes in existing “Buy American” provisions that apply to about a third of the $600 billion in the federal government’s goods and services.
“I don’t buy for one second that the vitality of American manufacturing is a thing of the past,” said Biden. “American manufacturing was the arsenal of democracy in World War II and it must be part of the engine of American prosperity now.”
One way to Biden plans to leverage the purchasing power is by replacing the fleet of federal cars with U.S.-made electric vehicles, a plan Biden previously announced on his campaign trail.
The manufacturing sector accounts for about 12% of the U.S. economy and Biden plans to revitalize it to drive up wages, create more union jobs, support minority-owned businesses and strengthen U.S. supply chains.
The AFL-CIO federation of trade unions welcomed Biden’s order.
“This order is a good first step in revitalizing U.S. manufacturing, which Trump’s policies failed to do over the past four years,” said AFL-CIO President Richard Trumka.
Major U.S. retailers, including Walmart have launched high-profile “Made in America” campaigns, only to court foreign manufacturers afterward. According to trade experts, rebuilding supply chains and developing new ones is key to seeing economic growth in the U.S.
The U.S. trade deficit rose to $68 billion in November, its highest level in 14 years due to businesses selling foreign goods and supplied domestic factories reliant on foreign parts, offsetting a rise in exports.
Biden’s order directs federal agencies to reevaluate the threshold used to determine U.S. content, to prevent companies that sell to the government from importing largely foreign-made goods and selling them as U.S.-made after making minor tweaks.
“America can’t sit on the sidelines in the race to the future. Our competitors aren’t waiting,” Biden said. “To ensure the future is made in America, we need to win not just the jobs of today, but the jobs and industries of tomorrow.”
