January 26, 2021
How Buy American Could Affect Federal Government Purchases
Yesterday President Biden signed an executive order that strengthens current rules requiring government purchases of goods made in the United States. In a new analysis, AAF’s Data and Policy Analyst Tom Lee examines the executive order’s impact and calculates the percent of foreign-made products bought by federal agencies. He notes: “It is difficult to imagine that ‘Buy American’ will have a large impact on U.S. manufacturing since U.S.-made goods already account for 96 percent of purchased goods.”
His central points:
- The rules would increase the domestic content rules, or the number of U.S.-made goods federal agencies must purchase; it also removed some of the exemptions and waivers that allow agencies to purchase foreign-made goods; and
- In practice, the new rules may have little impact as in fiscal year 2019 only 3.5 percent of federal purchases were foreign products.