“Made in America” just got a lot more stringent. New rules set by the Biden Administration mean automakers will need to ensure even more parts of their vehicles be made in the U.S. to secure the official “made in America” label.
The Detroit News reports the federal government is also required to buy, when possible, from American contractors and manufacturers.
The current policy dictates that at least 55 percent of a vehicle’s parts be made in America for it to be designed “Made In America.” The new rule would have that number gradually climbing. By October of this year the requirement is 60 percent. In January 2025 it bumps up to 65 percent. Finally, in January of 2029, it hits 75 percent. It should be noted this only qualifies for products bought with U.S. taxpayer dollars. Biden issued the proposal originally in July 2021 when he signed the Buy American executive order.
“Buy American became a hollow promise,” The President said at the time. “In my administration, Buy American is a reality.”
Biden also said that waivers and loopholes used to get around the requirement to buy American have skyrocketed in recent decades, and that has to end.
The rule also includes “enhanced price preferences.” That means the government agency that is buying a product would apply a percentage-based tax on foreign supply contracts. That would end up helping U.S. contractors by making the cost of doing business with them cheaper than doing business with foreign companies. In theory, at least.
According to Autoblog, the reason the increases are spread over seven years is the fact it will give companies enough time to figure out or create new supply chains. They say items that have been identified so far have been “semiconductor ships, pharmaceuticals, and advanced batteries” for electric vehicles.
Where this all comes back to cars is government fleet vehicles. GM and Ford are already working on their supply chains due the fucked-up-ness of everything you already know about.
There could be a lot of money up for grabs for American auto manufacturers. The outlet says the government spent $300 million on foreign engines and vehicles alone in 2018.