“Made In America” Executive Order Likely To Motivate FDI By Overseas Vendors – Government, Public Sector

United States:

“Made In America” Executive Order Likely To Motivate FDI By Overseas Vendors

Section 3 of the Executive Order mandates that all U.S.
Government Agencies immediately: review and consider reversing or
rescinding all Agency actions which are inconsistent with a Made in
America policy; and, consider proposing new Agency actions to
promote and enforce a Made in America policy. 

The Executive Order in its Section 4 establishes a new Made in
America Office within the Office of Management and Budget. This
Office shall systematize and coordinate waivers to the various U.S.
Made in America laws that are sought from U.S. Government
Agencies. The sense of this Section is that waivers by U.S.
Government Agencies of the requirements of Made in America Laws
will become more transparent, uniform and perhaps, difficult to
obtain. 

One factor relevant to the issuance of the waivers of U.S. Made
in America requirements – cost advantage, will now pursuant
to Section 5 of the Executive Order, be looked at differently.
Under the Executive Order, the cost advantage of a foreign sourced
products must be analyzed to determine whether any cost advantage
is significantly attributable to “the use of dumped steel,
iron, or manufactured goods or the use of injuriously subsidized
steel, iron or manufactured goods.” 

As to the promotion of transparency in the Agency waiver of Made
in America requirements process, Section 6 of the Executive Order
establishes a public website where all information relative to a
requested waiver will be posted. This public disclosure process
seems intended to facilitate public objections to the granting of a
requested waiver by domestic producers/manufacturers and other
interested parties. In addition, to better enable domestic
suppliers to challenge waivers of Made in America Laws, the
Executive Order supports the scouring of American companies that
produce goods, products and materials that meet the Federal
procurement needs. (See Section 7 of the Executive Order). 
    

The Executive Order seeks to promote enforcement of the U.S. Buy
American Act of 1933 by proposing for consideration by the Federal
Acquisition Regulatory Council (“FAR Council”) amendments
to applicable regulations which would replace the domestic content
component test with a value added test, increase the numeric
threshold for domestic content requirements and increase the price
preferences for domestic end products and construction materials.
(See Section 8 of the Executive Order). 
    

The Executive Order lastly directs the FAR Council to develop
recommendations for lifting constraints on the extension of Made in
America Laws to information technology that is a commercial
item.

The Executive Order seeks reports from all U.S. Government
Agencies within 180 days from issuance and thereafter bi-annually
on how the agencies will further and promote the Made in America
policy. 

The issuance of this Executive Order by the current
administration demonstrates that it intends to continue and
expand/accelerate the policies of the previous administration in
regard to Made in America requirements and policies. Given the
current and likely continuing trends in the U.S. of rapidly rising
construction costs, growing demand for industrial properties and
increasing site selection, due diligence and project acquisition
timelines, astute and forward thinking foreign sellers,
manufacturers and producers seeking to maintain or grow U.S.
Government subsidized sales or direct U.S. procurement sales would
be well advised to begin now to plan expanded production and supply
chains in the U.S.

Originally Published by Masuda Funai, March 2021

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