On 25 January 2021, US President Biden signed Executive Order (“EO”) 14005 titled, “Executive Order on Ensuring the Future Is Made in All of America by All of America's Workers.” The EO directs US federal agencies to take several measures to increase the purchase of goods and services from US-based companies under federally funded procurement contracts. Notably, it requires an increase of US content in goods produced for federal contracts, replaces the “component test” with a test that measures the value added to a product in the US, increases the price preferences for domestic end products, and creates a position in the Office of Management and Budget (OMB) that will be responsible for enforcement. The EO also encourages the head of each government agency to review and consider changes to its actions that are inconsistent with this “Made in America” policy.
To manage its enforcement responsibilities, the EO requires the OMB Director to establish the Made in America Office and appoint a new senior official, the Made in America Director, who will enforce the new policy and oversee all waivers from the “Made in America Laws,” which include the Buy America Act and Buy American Act, among others. It also requires US federal agencies to provide the Made in America Director with a description of any proposed waiver and a detailed justification for the use of goods of foreign origin, which will be published to the public.
The Biden Administration has also set a 180-day deadline for the head of each federal government agency to submit a report to the Made in America Director that summarizes actions taken to comply with the directives of this EO. They must also submit thereafter a bi-annual report that focuses on continued compliance, recommendations to further implement the policy, and an analysis of foreign suppliers used for products and services that are not subject to the Made in America Laws or have been waived by the Made in America Director.
Deloitte’s Global Trade Advisory specialists are part of a global network of professionals who can provide specialized assistance to companies in global trade matters. Our professionals can help companies seeking to manage the impacts and potential impacts of the developments described above by:
Meng Yew Wong