Monday, July 15, 2024

Biden ready to ‘buy American’ to boost domestic manufacturing

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US President Joe Biden is set to tighten “American buy” provisions as part of a push to boost domestic manufacturing, in a move that risks straining relations with key US allies.

Mr Biden is expected to order an increase in domestic content requirements for federal supply contracts on Monday, following a campaign pledge to boost the U.S. manufacturing industry as he seeks to overtake Donald Trump in major Swing states.

However, major US trading partners and strategic allies, including Canada and a number of European countries, have long complained that the purchase of US measures constitutes a protectionist attempt to exclude their multinationals from the US economy. .

Biden administration officials presented the changes to US federal contracting rules during a call to reporters, saying it marked an effort to rebuild “America’s backbone.”

“[Mr Biden] believes we can rebuild the vitality of American manufacturing and our industrial strength, and much of that centers on the idea that when we use tax dollars to rebuild America, we buy Americans, ”he said said an official in the Biden administration. “We support American jobs, union jobs.”

Mr Biden is expected to order an increase in domestic content requirements for federal contracts, a $ 600 billion industry, as well as crack down on waivers that are usually allowed for the use of foreign suppliers.

Administration officials said Mr Biden will also reiterate his support for the Jones Act, which requires goods shipped to the United States to be carried on American ships. They say it could help “invest in building renewable energy offshore and put Americans to work.” American allies in Europe have long urged Washington to repeal the Jones Act in order to allow more competition in the maritime sector.

Mr. Biden’s arrival at the White House was widely hailed by America’s Western allies and some of his early actions were applauded. These include decisions to join the Paris climate agreements, put an end to the American withdrawal from the World Health Organization and remove the entry ban on citizens of several Muslim-majority countries.

One exception was his decision to revoke the license for the Keystone XL pipeline connecting the United States to Canada, which sparked discontent north of the U.S. border, particularly in the energy-producing western provinces.

Mr Biden’s early procurement decision is also likely to be criticized in the capitals of several US allies, including Canada, as it will cement fears that the new administration is not interested in reverting to a program. of trade and investment liberalization, after four years. of Mr. Trump’s trade wars.

Mr. Biden and members of his team have often said that securing billions of dollars in new federal investment in the U.S. economy is the priority before new trade deals are considered. In weekend conversations With Boris Johnson, the British Prime Minister, and Emmanuel Macron, the French President, Mr Biden stressed his desire for cooperation on issues such as climate change, but there was no mention of trade, according to the accounts calls to the White House. .

A Biden administration official said the US administration is “very committed to working with its partners and allies to modernize international trade rules to ensure that we can use taxpayer dollars to secure investments in our own countries ”.

He also said that tighter sourcing could help build the resilience of U.S. supply chains, given weaknesses that emerged during the pandemic, so that “we are never put in a position where we depend on countries that do not share our interests in providing critical materials. “.


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