The order aims to use $600bn the federal government spends on procurement to boost domestic factories, officials said.
President Joe Biden plans to sign on Monday an executive order that aims to boost government purchases from United States manufacturers, according to administration officials.
The US has shed roughly 540,000 factory jobs since last February as the coronavirus pandemic hurled the world’s largest economy into recession. The goal of the order would be to use the $600bn the federal government spends on procurement to boost domestic factories and hiring, said officials who insisted on anonymity to discuss the forthcoming announcement.
Biden’s order would modify the rules for the Buy American programme, making it harder for contractors to qualify for a waiver and sell foreign-made goods to federal agencies. It also changes rules so that more of a manufactured good’s components must originate from US factories. American-made goods would also be protected by an increase in the government’s threshold and price preferences, the difference in price over which the government can buy a foreign product.
The order also has elements that apply to the separate Buy America programme, which applies separately to highways and bridges. It seeks to open up government procurement contracts to new companies by scouting potential contractors. The order would create a public website for companies that received waivers to sell foreign goods to the government, so that US manufacturers can have more information and be in a more competitive position.
To help enforce these goals, the order establishes a job at the White House Office of Management and Budget to monitor the initiative and focus on ensuring the government buys more domestically made goods. It also requires federal agencies to report on their progress in purchasing American goods, as well as emphasising Biden’s support for the Jones Act, which mandates that only US-flag vessels carry cargo between US ports.
Past presidents have promised to revitalise manufacturing as a source of job growth and achieved mixed results. The government helped save the automotive sector after the 2008 financial crisis, but the number of factory jobs has been steadily shrinking over the course of four decades.
The number of US manufacturing jobs peaked in 1979 at 19.5 million and now totals 12.3 million, according to the US Department of Labor. Biden’s predecessor, Donald Trump, famously promised a factory renaissance, yet manufacturing employment never returned to its pre-Great Recession levels before the coronavirus struck.