US President Joe Biden signed an executive order on January 25 giving domestic companies and products priority in contracting with the federal government, as the new administration attempts to spur domestic manufacturing.
The order is aimed at boosting national production and saving industrial jobs by increasing investments in factories and workers, and comes after Biden promised on the campaign trail to “build back better” as the US economy struggles through the Covid-19 pandemic.
Washington spends $600 billion each year on contracts, and the order tightens loopholes that allow federal agencies to buy products stamped “Made in America” but which are often manufactured by companies that only produce a small portion of their products in the US.
Biden said: “American manufacturing was the arsenal of democracy in World War II, and it must be part of the engine of American prosperity now. That means we are going to use taxpayer money to rebuild America.”
But the order risks running up against the country’s outsourced supply chains and also rankling US trading partners, most notably Canada.
The US and its southern neighbour Mexico along with Canada are all part of a free trade agreement that took effect last year, and Canadian Prime Minister Justin Trudeau raised the “Buy American” policy in a recent phone call with Biden, Deputy Prime Minister Chrystia Freeland said on January 25.
However, she noted that the US “sells more to Canada than it does to China, Japan and the UK combined. And what we are really going to focus on in our work with the Biden administration is those win-wins”.