19 July 2019
Efforts to Tighten Buy American Requirements in U.S. Government Procurement Continue
On 15 July, in conjunction with a White House Made in America Product Showcase, President Trump signed his third Buy American executive order proposing new rules to raise the domestic content requirement for federal contracts from 50 to 55 percent for non-iron and steel products and to 95 percent for steel and iron products. Specifically, within 180 days the Federal Acquisition Regulatory Council must consider an amendment to the rules that would reduce the allowed proportion of foreign materials for U.S. government contract purchases to five percent for iron and steel products and to 45 percent for other products.
The EO also directs the Secretary of Commerce and the Director of the Office of Management and Budget to issue a report within 180 days, in consultation with the FAR Council, the Chairman of the Council of Economic Advisers, the Assistant to the President for Economic Policy, and the Assistant to the President for Trade and Manufacturing Policy. This last position is currently held by Peter Navarro, who praised the new EO on Fox News television. The EO asks that the report consider whether and when to increase the required domestic content for non-iron and steel products even further, from 55 percent to 75 percent. The recommendations presented to the president should also include the feasibility and desirability of possible changes.
Trump declared at the Made in America Product Showcase that the philosophy of his administration is simple: “if we can build it, grow it or make in the United States, we will.” While Thomas J. Gibson, president and CEO of the American Iron and Steel Institute, praised the EO, Bryan Riley, director of the conservative National Taxpayers Union’s Free Trade Initiative, said that “while it might be a good headline for the administration, it’s taxpayers that will end up paying for this policy.”
The United States is a party to the World Trade Organisation’s Government Procurement Agreement and other WTO members have expressed concern about whether the Trump administration’s Buy American policies comply with WTO rules. However, one source noted that the EO has “wiggle room” because it requires the FAR Council to consider various measures within 180 days but does not actually mandate any particular action by that body.