How ‘Buy American’ order could play out across U.S.

WASHINGTON - When President Donald Trump signed an executive order Tuesday in Kenosha, Wisconsin, he sent a characteristically blunt message.

“The policy of our government is to aggressively promote and use American-made goods,” Trump declared.

For too long, he complained, American companies that have bid on U.S. government contracts — for work ranging from building roads to supplying computer equipment to federal agencies — have unfairly lost out to foreign competitors.

“The result has been countless jobs and countless contracts that have been lost to cheap, subsidized and low-quality foreign goods,” the president argued.

“Buy American” requirements that are written into U.S. law “have been gutted,” he said, by loopholes, allowing too many contracts to go to overseas bidders. Countless jobs and contracts that have been lost to cheap, subsidized and low-quality foreign goods, Trump asserted.

Here’s a look at how Buy American provisions work, what the White House intends to do and what it all might mean for government contracts and the taxpayers who finance them. » What is ‘Buy American’? The Buy American Act of 1933 requires the government’s purchases to favor U.S.-made products. Additionally, the Surface Transportation Act of 1978 requires that American-made iron, steel and other manufactured goods be used when federal dollars pay for highway, aviation, rail and other transportation projects.

» So what’s the White House’s complaint?

Government contracting “is a highly complex area, with lots of exceptions and exceptions to exceptions,” says Stephanie Harden, a lawyer specializing in government contracts at Blank Rome LLP. Government agencies can bypass U.S. suppliers, for example, whose bids come in too high or if the required goods and services aren’t available domestically. Under several freetrade deals — including the World Trade Organization’s Agreement on Government Procurement — contractors from 59 countries have the right to be treated the same as U.S. companies when it comes to many federal contracts.

But the White House says that such exemptions have gone too far and that U.S. contractors are unjustly losing out.

» What did the president’s order do? Not much — at least initially. Trump is ordering government agencies to review the way they award contracts to assess how they affect U.S. jobs and manufacturers and to make sure they “maximize the use of materials produced in the United States.” » What’s next? That’s not clear. Harden, anticipating a possible crackdown on how contracts are awarded, is telling clients to make doubly sure that they are complying with Buy American requirements.

But some analysts note that Trump has already retreated from some earlier vows to toughen America’s trade policies and say they suspect that the Buy American order might not amount to much.