WASHINGTON (Reuters) – President Joe Biden will tour a Mack Trucks plant in Pennsylvania on Wednesday to hammer home the importance of American manufacturing and unveil new rules that will gradually boost the U.S. content of goods bought with taxpayer dollars.
Biden will meet with local members of the United Autoworkers Union (UAW), which represents 85% of the 2,500 workers at Mack Trucks’ Lehigh Valley plant, and receive a briefing on the new electric-powered garbage truck the company is piloting in New York City and North Carolina, the White House said.
The Democratic president signed an executive order during his first week in office in January aimed at harnessing the vast buying power https://www.reuters.com/article/us-usa-biden/biden-signs-buy-american-order-pledges-to-renew-u-s-manufacturing-idUSKBN29U0Z3 of the federal government – the world’s biggest single buyer of consumer goods – to bolster U.S. manufacturing.
The new rules unveiled Wednesday followed dozens of meetings with industry and interagency discussions over the past 180 days, officials said. They would expand existing “Buy American” provisions, which apply to about a third of the $600 billion in goods and services the federal government buys each year.
If approved, they would raise the minimum U.S. content for manufactured goods from 55% to 60% immediately, and then to 65% in 2024 and 75% in 2029.
“This proposal will strengthen procurement as a tool to strategically shape markets and accelerate innovation,” a senior adminstration official said. “The future of our economy depends on continuing to market smart investments, giving our workers and companies the tools they need to compete.”
Interested parties will have 60 days to comment on the changes before the rule is finalized, the officials said.
The rule also proposes enhanced price preferences for certain critical products and components, a move that officials said would help bolster domestic production of critical goods and materials.
And it would boost transparency by requiring manufacturers to report the total domestic content of their products, instead of simply certifying that they meet the content threshold.
The new rule would not apply to services, which account for more than half the annual $600 billion in government procurement by the Department of Defense and other agencies, officials said.
Nor is it expected to have an immediate impact on supply chain bottlenecks such a global shortage of semiconductors that has slowed auto manufacturing and boosted inflation.
The officials said the Biden administration would continue to address those logjams through other measures.
Private sector initiatives to boost purchases of U.S.-made goods have floundered in recent years, given challenges in sourcing products at competitive prices.
Walmart (NYSE:WMT) Inc, for instance, had committed in 2013 to buy $250 billion in U.S. goods by 2023, but dropped the “Made in USA” logo from products on its website just two years later after a critical probe by the U.S. Federal Trade Commission.