U.S. President signs “Buy American” Executive Order

The President of U.S., Joe Biden, signed the executive order in a bid to tighten the “Buy American” requirements in the federal government procurement. This move by the President is the first step toward fulfilling his campaign promise.

Highlights

  • In 2019, federal government spent $586 billion on contracts for goods and services
  • The President vowed to invest hundreds of billions of dollars to buy American products and materials to modernize our infrastructure.
  • This in turn, will help in increasing the competitive strength in the competitive world.
  • They also promised to invest heavily in strategic sectors like the artificial intelligence in order to increase American competitiveness.
  • This move was also targeted to counter the “Made in China 2025” campaign by Chinese government.

Aim of the Executive Order

  • The executive order was signed with the objective of Strengthening the manufacturing sector in the country.
  • Further, the government wants to make it harder for government agencies to purchase foreign products.
  • It also aims to raise the percentage of local content (U.S. Made).
  • The order will also include job creation in the definition of U.S.-made.
  • Lastly, it seeks to extend the provisions to information technology which is currently exempt.

 Buy American Act

This act was passed in 1933 by Congress and signed by President Hoover on his last full day in. The act ensures that the United States government is preferring the U.S.-made products in its purchases. This act is different than the “Buy America Act”. Under the act, exceptions could be given in certain cases if the domestic product is 25% or more expensive than a similar foreign-sourced product or if it is being done in the public’s interest. This act can be waived by the President.

Section 165 or the “Buy America” Act

The act applies to mass-transit-related procurements. The act was established to give preference to the use the domestically produced materials on any procurements funded by the federal funds.

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