Trump Orders Beefing-Up of ‘Buy American Laws’

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By Len Bracken

Laws requiring the use of U.S.-sourced goods and services for government contracts would be bolstered by an executive order issued April 18 by President Donald Trump.

“We are sending a powerful signal to the world: We’re going to defend our workers, protect our jobs and finally put America first,” Trump said at American manufacturing event in Kenosha, Wis., hosted by Snap-On Inc., a tool manufacturer, where he signed the order.

The order seeks to maximize U.S. content and minimize waivers and exceptions to laws that the administration refers to collectively as “Buy American laws.” U.S. trade agreement partners are typically given waivers to the Buy American Act of 1933 that governs direct purchases by the federal government.

“If it turns out America is a net loser because of those free-trade agreement waivers, which apply to almost 60 countries, these waivers may be properly renegotiated or revoked,” a senior administration official said in an April 17 briefing with reporters.

Another law cited in the order, the Surface Transportation Act of 1978, requires the use of U.S.-made iron and steel, and the domestic production and assembly of other manufactured goods when federal funds are used to support projects like highways, public transportation, aviation and intercity passenger rail, such as Amtrak.

Dumping, Subsidy Reviews

The bidding process for government contracts will also now take into account the use of unfair trade practices, such as dumping of goods in the U.S. at below market price and the use of illegal subsidies. The U.S. currently has punitive duties related to these unfair trade practices concerning steel products from numerous countries.

“Here, it is useful to note that every direct job in the U.S. steel industry creates seven more jobs in the U.S. economy,” the official said. “And through this multiplier effect, the steel industry here in America supports more than a million jobs.”

As part of this multiplier effect, the benefits of Buy American are felt throughout the supply chain, assisting suppliers of raw materials critical to steelmaking, such as iron ore, coal and limestone miners, he said.

The order also cited the Berry Amendment, which is a statutory requirement that restricts the Department of Defense (DoD) from using funds appropriated or otherwise available to DoD for procurement of food, clothing, fabrics, fibers, yarns, other made-up textiles, and hand or measuring tools that are not grown, reprocessed, reused or produced in the U.S., according to the Department of Commerce website.

The order calls for every federal agency and department to assess enforcement and compliance efforts. Commerce Secretary Wilbur Ross will review the agency findings and submit a report to the president within 220 days on ways to close loopholes.

“And knowing Secretary of Commerce Wilbur Ross, don’t be surprised if some of those recommendations come in well before the 220-day deadline,” the senior official said.

To contact the reporter on this story: Len Bracken at lbracken@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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