Gradually scaling back tariffs by China and the US could create an additional 145,000 jobs by 2025, study finds.
President Joe Biden signed an executive order Monday that seeks to enforce existing United States government “Buy American” provisions and close loopholes as part of his administration’s efforts to boost the country’s manufacturing sector.
“We are going to use taxpayers’ money to rebuild America,” Biden said at the White House. “We’ll buy American products and support American jobs, union jobs.”
The order targets the $600bn the US government spends on federal contracts and will direct agencies to increase “the threshold and the price preferences for domestic goods”. It will also create a “central review” of potential waivers to “Buy American” requirements as well as direct a “cross-agency review of all domestic preferences”, according to the White House.
A new “Director of Made-in-America” within the Office of Management and Budget will implement and monitor these new rules.
“It is long overdue that the U.S. government utilizes the full force of current domestic preferences to support America’s workers and businesses, strengthening our economy, workers, and communities across the country,” the White House said in a fact sheet outlining the executive order.
Asked if the order would be seen as protectionist, a senior Biden administration official told the Reuters news agency it was fully consistent with US commitments under the World Trade Organization. The White House hopes to work with trade partners to modernise global rules, he said.
“He does not accept the defeatist idea that automation, globalisation mean that we can’t have good-paying union jobs here in America,” the official told Reuters.
Biden promised during his campaign to create more US manufacturing jobs and accused former President Donald Trump of breaking his promises to do so.
Under Trump, Biden claimed “federal agencies waived the ‘Buy American’ requirement without much pushback at all.”
“The result: Tens of billions of American taxpayers’ dollars supporting foreign jobs and foreign industries.”
Biden’s executive order is part of the president’s wider promise to increase wages and create more union jobs.
Years of US companies outsourcing manufacturing to countries such as China, where workers’ wages are lower and environmental standards are less strict, have contributed to the reduction of manufacturing jobs in the US. The sector has also seen jobs lost to automation.
America’s factories employed more than 19.5 million people at the sector’s peak in 1979, according to the US Department of Labor. There were 12.3 million Americans working in manufacturing in December – nearly half a million fewer than February’s pre-pandemic level.