In Southeast Michigan – home to Ford, General Motors, Chrysler, and once upon a time, AMC and a handful of other now-defunct automotive manufacturers – “Buy American” is more than just a slogan. Now, many in the area might find themselves applauding a recent move by the Biden administration: to increase the US parts-content requirement for products to be considered “Made in America” by the federal government.
The move is mostly relevant because the US federal government follows a directive to buy from US-based contractors and manufacturers whenever possible, but to qualify as “American-made,” products only have to contain at least 55% US-made parts. Now, under Biden, that percentage is set to go up, first to 60% this October, and then to 65% in January 2024. By 2029, government-purchased products will have to contain at least 75% US-made parts.
Granted, the US government does make exceptions when something isn’t available from US firms in sufficient quantities, or when US-built versions of the product aren’t up to the government’s standards, as The Detroit News reports. Those waivers have been used with growing frequency over the past few decades as US manufacturing has dwindled to a fraction of what it once was, leading Biden to label the government’s “Buy American” pledge historically “a hollow promise” – something his administration hopes to correct.
What, Specifically, Does This Have To Do With Autos?
One detail that might interest those who follow the automotive industry – apart from the fact that any vehicle purchased by the federal government will be subject to the same parts rules as everything else – is that it includes “enhanced price preferences” for certain key products. Those are percentages added to the prices of foreign-made products when it comes to crunching the numbers and seeing which manufacturers offer the best pricing, and the affected products include minerals, semiconductor chips, and electric vehicle batteries, among other things.
In other words, this Biden administration move could make it more likely that the government taps US automakers to supply EV batteries rather than foreign firms, while potentially also creating a larger, more welcoming market for minerals and semiconductor chips produced domestically. A full list of products impacted hasn’t yet been released, but according to one Biden administration official, it includes things the government thinks “will be critical to America’s economic security and national security,” The Detroit News reports.
“What we’ve seen in the past month is more reason why we need to reject the defeatist view that the forces of automation and globalization mean we can’t have good-paying union jobs manufacturing here in America,” President Biden said. “Our manufacturing future, our economic future, our solutions to the climate crisis, they’re all going to be made in America.”