Biden announces strengthened Buy American rule to help boost domestic manufacturing as he touts February job numbers

By Sam Fossum and Kate Sullivan, CNN

President Joe Biden on Friday announced his administration finalized a new Buy American rule aimed at helping to boost US domestic manufacturing, an increasingly important effort as the country strives to compete with China and create more resilient domestic supply chains.

The Buy American rule change, which was first announced in July 2021, will require any goods purchased with taxpayer money to contain 75% US-made content, up from the current 55% requirement.

In remarks from the White House, the President also touted an announcement from Siemens USA that it will expand its domestic manufacturing of electrical equipment, like circuit boards for EV chargers, with a new $54 million investment that it says will create 300 jobs.

The President spoke hours after the Bureau of Labor Statistics reported February’s job numbers exceeded expectations as the US economy added 678,000 jobs during the month. The unemployment rate ticked down to 3.8% in February as well, a new pandemic low.

“Today’s news is a welcome reminder that we’re coming back stronger as a country and as a people,” Biden said.

A senior administration official said the rule will be phased in order to give companies time and space to modify their supply chains. That process will begin this year with the requirement shifting to 60% in October and then to 75% by 2029.

The new rule will also include “a framework” to institute enhanced price preferences for designated critical products and components in strategic industries, according to the official, who noted that this is important for both “national and economic security.” The exact details of this will be part of a second rule-making process.

It’s unclear how many companies or products this will impact since the new Buy American rule coming out of the Federal Acquisition Regulatory Council does not include an update allowing the federal government to verify claims made by contractors about the percentage of domestically made content in their products. The official noted, however, that the administration still expects to ultimately institute a reporting requirement for companies — something the President pledged when he announced the proposal last year.

“First, 55% (US-made content) is not high enough, and second, contractors don’t have to tell us the total domestic content of their products. They just have to tell us that they hit the threshold. With nobody checking. They’ve got a new sheriff in town. We’re going to be checking,” Biden said last July during a trip to Pennsylvania.

The process for the new rule began with Biden’s Made in America executive order that established a 180-day interagency review and created the Made in America office at the Office of Management and Budget. That position at OMB helps agencies implement the Made in America rules, oversees the process by which contractors can apply for waivers from them and updates the public on granted exceptions by posting that information on a public website.

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