President Joe Biden and the president and CEO of Siemens USA announced Friday a major domestic manufacturing investment as part of the president’s plan to bolster his "Made in America" policy.
The announcement was made at an event in which the president unveiled a new update to the Buy American Act, which will mandate that a product must have a higher share of components made in the U.S. to qualify as "Made in America."
Under the current rules, a product purchased by the federal government with taxpayer dollars can be considered "Made in America" if it contains 55% of components made in the United States. Biden announced Friday that beginning in October, that threshold will jump to 60%. It will jump again to 65% in 2024 before ultimately leaping to 75% in 2029.
“We're going to buy American — buying American products to support American jobs,” Biden said. “And by the way, these are the best products in the world.”
This, the administration says, will close loopholes in current regulations while allowing businesses to adjust supply chains for using American-made components. It will also create a framework allowing the government to set price preferences for “critical products and components,” such as semiconductors, pharmaceuticals and batteries.
"The final rule will ensure taxpayer dollars create good-paying jobs here at home, strengthen critical supply chains and position U.S. businesses to compete in strategic industries," an administration official said.
The U.S. spends $600 billion annually to buy goods and services, the White House said, and the president "believes that when taxpayers foot the bill, that spending should invest in American workers, manufacturers and small businesses."
As part of the White House’s announcement, electronics manufacturer Siemens USA said it is expanding its domestic production, in keeping with the president’s goals of increasing domestic manufacturing and ramping up American tech development. Siemens USA President and CEO Barbara Humpton announced a $54 million investment to expand domestic production, and the creation of 300 new electronic manufacturing jobs to produce everything from electric vehicle chargers to data centers.
Some of those jobs will be located in Texas and California.
“A new era for manufacturing is now taking shape in America,” Humpton said.
“We've seen how essential global innovation can be — and it will continue so. But as supply chains have been disrupted and we've also seen how important it is to be able to establish local production capabilities, we see that we can build resilience against future disruptions,” she added.
The federal government is Siemens’ biggest customer.
The announcements were signaled earlier in the week during Biden’s State of the Union address.
“There’s been a law on the books for almost a century to make sure taxpayers’ dollars support American jobs and businesses,” Biden said Tuesday night. “Every administration says they’ll do it, but we are actually doing it.”
He called upon tech manufacturers to “level the playing field with China and other competitors.”
The president also touted major planned investments by Intel, General Motors, Boeing and MP Materials to create thousands of jobs at sites across the United States. Combined, the companies have announced a $47.7 billion investment in manufacturing.
“We need to reject the defeatist view that the forces of automation and globalization mean we can't have good-paying union jobs in manufacturing here in America,” Biden said Friday. “Our manufacturing future, our economic future, our solutions to the climate crisis, they're all going to be made in America.”
At an event in Pennsylvania last summer, Biden said that the current 55% threshold "is not high enough," adding that "contractors don't have to tell us the total domestic content of their products. They just have to tell us that they hit the threshold, with nobody checking."
"They've got a new sheriff in town," he added. "We're going to be checking."