President Joe Biden said Friday that he is incrementally increasing the percentage of components made in America that make up federally purchased "Made in the USA" goods.
"I’m announcing the biggest change in the Buy American Act in 70 years," Biden said during an address Friday.
"Right now, if you’re manufacturing a product that gets purchased by the federal government, the law says that 'substantially all' of that product should be made in the United States.
"But because of loopholes over time, you know what 'substantially all' means when I took office? If 55% is made in America, it’s 'substantially all.' To me, 55% isn’t 'substantially all,' it’s slightly over half. Today, we’re issuing a rule to raise the amount of domestic content required to be considered 'Made in America' from 55-75%. 'Substantially all' is going to start meaning substantially all."
The percentages will increase from 55% to 60% this year, 65% by 2024, and 75% in 2029, according to the White House.
The increased percentages will come from closing current loopholes in the law while allowing businesses to onshore manufacturing and adjust supply chains to increase components made in the U.S., the White House said.
A new manufacturing office has been established within the Small Business Administration federal contracting division, partnering with the Hollings Manufacturing Extension Partnership to identify and develop American manufacturing sources for government needs.
Biden said that America discovered its supply chain vulnerabilities during the COVID-19 pandemic and is taking steps to ensure critical items are made in the country.
"We’re creating a new 'price preference," he said.
"What this means is that if we’re identifying some product that is so critical to our national security, health, or resilience, that we’re going to create rules to allow us to pay a little more for them if they’re made in America.
"We’re talking about things like semiconductors, some pharmaceutical ingredients, advanced batteries — among other things. It’s worth it for us to ensure we have a domestic capacity to protect us from shortages and price spikes in the future."
He said that the United States would still be trading with allies and friends to eliminate "global chokepoints" for critical goods, but also make sure we have our own supply chain within the country.
"We’re going to keep trading with our allies and friends, and we’re going to work with them to ensure every single country can create global chokepoints for critical goods — can’t have those chokepoints," he said. "But we also need a resilient supply chains of our own so that we’re never at the mercy of other countries for critical goods ever again."
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