Dive Brief:
- President Donald Trump issued a new executive order this week meant to "enforce the Buy American Act to the greatest extent permitted by law." The act, created in 1933, generally requires that American-made products be given preference on certain projects that receive federal funding.
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The president is proposing that materials be considered "of foreign origin" if the cost of the foreign products used in the material is 45% or more of the total cost. For steel and iron products, that threshold would be 5%. Current Buy American regulations consider a product foreign if 50% of the cost comes from foreign products.
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The Federal Acquisition Regulatory (FAR) Council will consider and evaluate public comments for the next 180 days and then issue a final rule. The president has also asked the FAR Council to consider whether the foreign content threshold for products other than steel and iron should be lowered to 25%.
Dive Insight:
In comments to Engineering News-Record, Brian Deery, senior director of the Associated General Contractors of America's highway and transportation division, said that the new rules would only affect direct federal contracts with agencies like the U.S. Army Corps of Engineers or the General Services Administration. He said the new requirements would not have a direct impact on the federal-aid highway program because states are the contracting agencies for that initiative.
In separate comments at a White House event, President Trump told those in attendance that "a product can be 50% foreign, and it still counts as American-made. Figure that one out." The president also said that the U.S. has the capacity to produce its own steel and aluminum but that in some cases environmentalists were getting the blame for preventing that. He indicated that would change in the near future. "The philosophy of my administration is simple," he said. "If we can build it, grow it or make it in the United States, we will."
The president made buying internationally sourced products less attractive by imposing tariffs on steel and aluminum manufactured in foreign countries more than a year ago. The administration has since placed additional tariffs on products made in China.
In May, however, the president lifted the tariffs on steel and aluminum imported from Mexico and Canada in exchange for assurances that the countries would do their best to make sure that Chinese materials didn't make their way into the U.S.
