Expansion of US-made goods recognition criteria to 75% of parts
Current standard is 55%
Aiming to stabilize supply chains for economic security and job growth
U.S. President Joe Biden is delivering a speech at a truck factory, announcing the federal government's plan to strengthen regulations on purchasing American-made products. [Image source=AP Yonhap News]
[Asia Economy New York=Special Correspondent Baek Jong-min] The Biden administration in the United States has strengthened regulations on purchasing American-made products for procurement. President Biden also expressed a strong commitment to stabilizing supply chains by producing semiconductors and batteries domestically in the U.S.
Accordingly, Korean companies are expected to increase the use of American-made parts and expand local production to target the $600 billion (692 trillion won) annual U.S. procurement market.
The White House announced on the 28th (local time) that it will significantly raise the regulation that recognizes a finished product as American-made if more than 55% of its parts are American-made, allowing the federal government to purchase it.
This measure immediately recognizes products using 60% American-made parts as American-made, which is 5 percentage points higher than the current standard. Subsequently, the proportion of American-made parts will be gradually increased, requiring 75% American-made parts by 2029 to be recognized as American-made.
By strengthening the usual 6% price preference offered to American-made products during bidding for key items, the government plans to support the development and expansion of domestic supply chains. To improve government data on the proportion of American-made products, reporting requirements for key items will also be newly established.
The White House explained that this measure will support the production of goods necessary for U.S. economic security within the United States.
The U.S. government plans to implement this plan after a 60-day public hearing and feedback process.
President Biden visited the Mack Truck plant in Pennsylvania on the same day and said, "Past promises to buy American-made products were hollow, but I will make buying American-made a reality."
He repeatedly emphasized that all his policies ultimately boil down to 'Buy American.' President Biden also mentioned that this would increase American jobs.
He added that semiconductor companies from Korea and Taiwan have been encouraged to build factories in the U.S., stating, "We are prioritizing discussions on semiconductors, batteries, and pharmaceuticals. While we will trade with allies, we must have resilient supply chains so that we never again rely on other countries for critical goods." Furthermore, he said, "I will bet on America," signaling a victory in competition with China and a recovery of the competitiveness of American manufacturing.
President Biden emphasized that this decision is the most groundbreaking change in 70 years since the implementation of the Buy American Act in 1930. He also insisted, "All 600,000 vehicles owned by the federal government must be replaced with American-made ones."
Previously, President Biden issued directives to expand the purchase of American-made goods across federal government departments and signed related executive orders. He has strengthened the 'Buy American' policy by expanding the 'Made in America' policy of the former Trump administration.
The Washington Post explained that this plan reflects the intention to strengthen the U.S. manufacturing base and produce key materials such as semiconductors, batteries, and medical supplies domestically.
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