U.S. president signs executive order instituting stringent new Buy American regimen
President Joe Biden imposed stringent new made-in-America rules for U.S. government spending Monday, adding a caveat likely troubling to Canada: exceptions to those rules will be allowed only under “very limited circumstances.”
Monday’s Buy American executive order was the result of a cornerstone Biden campaign promise, one designed to corral swing-state support among the protectionist, bluecollar voters who elevated Donald Trump to the White House in 2016.
The aim of the policy is not a new one in U.S. politics: ensuring that American manufacturers, workers and suppliers are the primary beneficiaries of U.S. government largesse, including an estimated $600 billion a year in procurement contracts.
The Trump administration liked to talk about Buy American, Biden said, but ultimately did little to toughen or even enforce the rules.
“That is going to change on our watch,” he said, signing an executive order to raise standards for U.S. content, increase oversight and provide for more stringent enforcement.
The measures include a “Made in America” office attached to the White House to police the use of waivers — the exceptions that allow Canadian contractors, manufacturers and suppliers access to a lucrative and often essential source of business.
That office will “review waivers to make sure they are only used in very limited circumstances — for example, when there’s an overwhelming national security, humanitarian or emergency need here in America,” Biden said.
“This hasn’t happened before. It will happen now.”
Waiver details will also be posted on a U.S. government website to provide more public transparency about who is getting around the rules and why.
The plan would also increase the amount of U.S.produced materials or components a project or product would need to qualify as American-made, and make it easier for small and mediumsized businesses to access procurement opportunities.
It also requires government agencies to provide twice-yearly progress reports on their efforts to follow the new rules.
“I don’t buy for one second that the vitality of American manufacturing is a thing of the past,” Biden said. “American manufacturing was the arsenal of democracy in World War Two, and it must be part of the engine of American prosperity now.”
Mark Agnew, the director of international policy for the Canadian Chamber of Commerce, said Canada will find little of comfort in Monday’s news.
“Buy American restrictions remain a perennial problem for Canadian businesses seeking to access government contracts with our largest trading partner,” Agnew said in a statement.
“Although the rules have progressively tightened over the years, (Monday’s) announcement represents another unhelpful step to make it more difficult for Canadian businesses to secure contracts in the U.S.”
In the midst of a deadly pandemic and resultant economic free fall, Canada and the U.S. should be looking for ways to join forces and leverage their strengths to fortify existing cross-border supply chains, Agnew said.
“Although the full impact of (Monday’s) announcement will take time to cascade to different parts of the U.S. government, its chilling effect on business will be acutely felt north of the border.”
As if to certify the echo of Trump’s “America First” mantra, Century Aluminum — a U.S.-based producer that led last year’s charge in favour of tariffs on Canadian aluminum imports — cheered Biden’s measures.