The Trump administration will use a new executive order to expand “Buy American” requirements to infrastructure projects that receive federal financing as a way to boost the use of American-made products and support U.S. manufacturing and jobs, White House adviser Peter Navarro said Thursday.
“These programs create good manufacturing jobs at good wages and thereby help lift workers into middle class prosperity,” Navarro said.
President Donald Trump signed the order Thursday.
Navarro, director of trade and manufacturing policy, told reporters Buy American requirements generally apply to direct federal purchases of goods or products.
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He said the administration wants to close “possible gaps in Buy American coverage” that allows agencies to provide loans, loan guarantees, grants, insurance, interest subsidies or other forms of financing for bridges, roads, sewer systems, broadband internet, cyber security and other projects without encouraging the purchase and use of U.S.-made steel, aluminum, cement and other products. The use of American-made products would apply to contracts, subcontracts, purchase orders and subawards.
“If an agency like the Department of Transportation spends money directly on the construction of a road or a bridge or some other piece of infrastructure, Buy American generally comes into play. But if an agency provides indirect support through this federal financial assistance such as loans, loan guarantees or grants, Buy American may not apply,” Navarro said.
He said extending Buy American requirements would keep “Buy American dollars from falling through the cracks.” Navarro said a review of projects that received federal financing in fiscal 2016 found that Buy American requirements did not apply to 200 of 265 infrastructure projects that received financing. He said the 200 projects across 14 agencies added up to $45 billion.
Several federal laws are designed to boost the procurement and use of American-made products, and by extension support U.S. manufacturing and jobs. The laws include 1933 legislation for government purchases of more than $3,000, the 1982 legislation for government infrastructure projects and 1994 legislation that, among other things, applies to certain purchases made by the Defense Department.
Navarro said the new order builds on an executive order issued in April 2017 that launched reviews of so-called Hire-American, Buy-American practices in federal agencies and to limit exemptions or waivers to Buy American provisions. The 2017 order focused on scrutinizing visa programs that allow companies to hire foreign workers and government procurement provisions in trade agreements that allow federal agencies to buy goods from foreign companies.
The trade pacts allow the U.S. and its trading partners to waive requirements that procurement contracts for government-funded projects can only go to domestic companies. The U.S. can select foreign companies that successfully bid on government projects, and trading partners can do the same with American companies. However, the Trump administration said trading partners have not treated U.S. companies fairly.
Navarro said the 2017 order led to a “fairly dramatic reduction across the agencies from the EPA to the Federal Highway Administration” in waivers or exemptions from Buy American requirements. He said there’s been a $24 billion increase in federal spending on U.S. goods and a 10-year low in U.S. purchases of foreign goods.