Jul 28, 2021 - Politics & Policy

Proposed Biden rule aims to decrease U.S. dependence on foreign manufacturing

Photo of Joe Biden speaking from a podium and gesturing with his hands

Photo: Alex Edelman/CNP/Bloomberg via Getty Images

President Biden will announce a proposed rule on Wednesday that aims to increase U.S.-made content in federal purchases and bolster critical supply chains, according to administration officials.

Why it matters: The pandemic-induced PPE crisis and recent chip supply shortages have highlighted the U.S. dependence on foreign nations when it comes to manufacturing, Axios' Hope King writes.

Details: Biden's changes to the implementation of the Buy American Act would...

  • Require that products bought with taxpayer dollars have 60% of the value of their component parts manufactured in the U.S., an increase from 55%.
    • The administration plans to raise the threshold to 75% by 2029.
    • The move would "close a problematic loophole in the current regulation, while also allowing businesses time to adjust their supply chains to increase the use of American-made components," a White House fact sheet said.
  • Strengthen domestic supply chains for critical goods with new price preferences.
  • Establish a reporting requirement for critical products that would increase compliance with the act and improve data on U.S. content of goods.

What they're saying: "The future of our economy depends on continuing to make smart investments, giving our workers and companies the tools they need to compete and using taxpayer dollars to spark American innovation," a White House official said.

  • "These investments will ensure that the manufacturing sector expands."
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