U.S. President Joe Biden will sign an order on Monday requiring the federal government to increase its purchases of American goods, relative to foreign goods.
Monday’s order asks agencies to update the existing ‘Buy American’ government procurement rules – including by requiring an increase in the amount of U.S. content that has to go into products being sold to the federal government and updating how the composition of products is measured.
It also increased the government’s price differential for American products relative to foreign ones. The order also mandates the creation of a new senior position to oversee the Buy American program and a website to publish any waivers to the sourcing requirements.
ADVERTISEMENT
Mr Biden has been undoing a number of his predecessor Donald Trump’s policies – such as those that were viewed as divisive, or harmed particular minority groups, or promoted American retrenchment from the world.
However, Monday’s executive order is in the same thematic direction as at least some of Mr Trump’s policies that sought to use the power of the federal government - $600 billion a year in contracts - to promote domestic rather than foreign industry. Some 2/3rds of the purchases were made by the Defense Department.
Manufacturing jobs have been on the decline in the U.S. over the last two decades, not just because sourcing abroad was more cost effective but also due to a significant increase in automation.
ADVERTISEMENT
Mr Trump ran a campaign in 2016 promising a manufacturing resurgence. In the first 30 months of the Trump administration, U.S. manufacturing added just under 500,000 jobs – a stronger record in this respect than the last 30 months of the Obama administration.
However, Mr Trump’s trade war with China followed by the pandemic was bad news for manufacturing job growth. There are some 60,000 fewer manufacturing jobs now in the U.S. than when Mr Trump took office, according to AP Fact Check.
“This order is deeply intertwined with the President’s commitment to invest in American manufacturing, including clean energy and critical supply chains, grow good-paying, union jobs, and advance racial equity,” an announcement from the White House said about Mr Biden’s order.
While the order will impact several countries that trade with the US governent, Indian manufacturers are not likely to be impacted in a significant way.
"I seriously doubt there will be a significant impact on Indian exporters,” Mark Linscott, a former Assistant U.S. Trade Representative told The Hindu .
"U.S. procurement is already very restricted for India because India is not part of any trade agreement with the United States covering government procurement. U.S. statistics show that India is not among the top 20 foreign suppliers to the U.S. procurement market,” he said.