The Buy American policy got a major boost this week when President Donald Trump signed an executive order that will force local agencies to consider American companies first before looking overseas. The order tightens waivers and exemptions that agencies use to get around procurement laws favoring American-made goods. Agency heads now have to consider whether a foreign government is involved in unfair trade practices when considering bids for projects.
The executive order, which was signed on Wednesday, April 19 is based on the twin pillars of minimizing waivers and exceptions to Buy American while maximizing Made in America content. The first step, according to the order, will be to root out any loophole in the Buy American policy. Every agency and government department will be required to conduct top-down assessments to find out any policies that might be weakening monitoring, enforcement, and compliance with Buy American. These agencies will then advise the President on how to seal these loopholes.
The flagrant use of unfair trade practices such as injurious subsidization and dumping that are currently being used to take away government contracts from local American workers will be particularly under the spotlight.
The order also takes a harder look at how America can benefit more from the foreign procurement market. It turns out America has been a net loser in global trade when it comes to foreign contracts because of the existing free-trade waivers; waivers that currently apply to over 60 countries. The new order is keen on carefully renegotiating these waivers and even revoke a few if need be.
What exactly is in the order?
There are two main laws governing the purchase of American-made products. The first law, Buy American, dates back to 1933 and governs direct purchases by the federal government. The second law, Buy America, was enacted in 1978 and requires the use of U.S. made iron and steel as well as the domestic production and assembly of manufactured goods – if federal funds are being used to support the projects in questions.
The executive order, first, clarifies that these two laws, as well as any supporting legislation such as the Berry Amendment, will be referred to as Buy American laws. Secondly, it directs every agency to put greater effort in monitoring, enforcing, and complying with these laws. Third, it warns agencies that they will be held strictly responsible should the Buy American mission fail.