Biden Announces a Tougher New Rule for Federal Buy America Procurement

By Matthew McMullan
Mar 04 2022
Siemens USA CEO Barbara Humpton speaks at the White House as President Biden looks on. Photo courtesy the White House

Content Threshold will move from 55% to 60% this year, to 65% by 2024, and 75% by 2029.

President Biden announced today the finalization of a new Buy American rule for federal procurement.

Many of the federal government’s purchases are already governed by Buy America policies. Speaking from the White House, the president said the new content threshold for what the feds will consider a Made In America product will increase from its current level of 55 percent to 60 percent this year, 65 percent in 2024, and 75 percent in 2029. Biden was joined at the event by the CEO of Siemens AG, who said her company would be spending roughly $54 million to expand domestic production of electrical components for its products. That spending will likely help Siemens’ American-made products remain eligible under the updated federal procurement thresholds.

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This rule slots in nicely with the president’s rhetoric. He spent a lot of time talking about domestic manufacturing during his recent State of the Union address. And a higher American-made threshold is a promising step toward the administration’s goal of re-establishing supply chains for critical goods in the United States. Buy America rules essentially establish a market for domestically manufactured goods in the United States, thereby encouraging industries long lost to offshore markets to grow here again.

What’s more, this kind of rule should (in the long term) encourage more manufacturers to set up shop in the U.S. and thereby lead to more jobs created in the sector. Add ’em to the pile – in 2021, the American economy created roughly 365,000 manufacturing jobs, which is the most in a year in literally decades. Just today we got the job creation numbers for the month of February from the Bureau of Labor Statistics: 678,000 jobs created overall, with 36,000 of them in the manufacturing sector. If that rate holds steady, 2022 could be another banner year for manufacturing job creation.

Here’s what Alliance for American Manufacturing President Scott Paul said in response to today’s news:

“Manufacturing has momentum. Now, we have to keep it going. That starts with making sure that as we work to rebuild America’s infrastructure, Buy America preferences are applied and enforced. All of those new roads and bridges, pipelines and fiber optics, transit systems and more should be Made in America. Otherwise, we’ll send taxpayer money overseas — and good-paying jobs with it.

“Passing a strong jobs and competitiveness bill like the Bipartisan Innovation Act also is critical. Doing so will help strengthen American manufacturing and re-shore supply chains, which will create even more jobs.”