Strengthening American Manufacturing

President Biden is determined to strengthen U.S. manufacturing. “I don’t buy for one second that the vitality of American manufacturing is a thing of the past,” he said in remarks before the signing of his Executive Order on Strengthening American Manufacturing. “American manufacturing was the arsenal of democracy in World War II, and it must be part of the engine of American prosperity now.  That means we are going to use taxpayers’ money to rebuild America.  We’ll buy American products and support American jobs, union jobs.”

Biden went on to explain how his plan is different from previous administrations that said they would increase U.S. manufacturing jobs and failed to do so.

“I’m creating a director of Made in America at the White House Office of Management and Budget who will oversee our all-of-government Made in America initiative.  That starts with stopping federal agencies from waiving Buy American requirements with impunity, as has been going on.  If an agency wants to issue a waiver to say “We’re not going to buy an American product as part of this project; we’re going to buy a foreign product,” they have to come to the White House and explain it to us,” he said.  “We’re going to require that waivers be publicly posted; that is, if someone is seeking a waiver to build this particular vehicle or facility and is going to buy the following foreign parts, that waiver — the request for it — is going to be posted.  Then we’ll work with small American manufacturers and businesses to give them a shot to raise their hand and say, ‘Yeah, I can do that here in my shop, in my town.’”

The specific requirements of the Buy American rules will be changed. “Under the Build Back Better Recovery Plan, we’ll invest hundreds of billions of dollars in buying American products and materials to modernize our infrastructure, and our competitive strength will increase in a competitive world,” said Biden. “That means millions of good-paying jobs, using American-made steel and technology, to rebuild our roads, our bridges, our ports, and to make them more climate resilient, as well as making them able to move faster and cheaper and cleaner to transport American-made goods across the country and around the world, making us more competitive.”

Pandemic effects on supply chains

Biden referred to the problems the coronavirus pandemic created for U.S. supply chains. Lots of medicines that are frequently used or prescribed in the United States are made in India or in China. When those sources were shut off, American companies weren’t prepared to step up to replace them.

Biden favors increasing stockpiles, something that hasn’t been done in recent JIT systems.

“We’ll also make historic investments in research and development — hundreds of billions of dollars — to sharpen America’s innovative edge in markets where global leadership is up for grabs — markets like battery technology, artificial intelligence, biotechnology, clean energy,” said Biden. He also promised to replace government auto fleets with new, American-made electric cars.

“The executive action I’m signing today will not only require that companies make more of their components in America, but that the value of those components is contributing to our economy, measured by things like a number of American jobs created and/or supported,” Biden continued. “When we buy America, we’ll buy from all of America.  That includes communities that have historically been left out of government procurement — black, brown, Native American small businesses and entrepreneurs in every region of the country.”

Strong manufacturing?

While some economists are optimistic about a rebound in the economy, manufacturing jobs were strongly affected by the pandemic.

The figures above, from the U.S. Office of Labor Statistics, show a striking improvement so far. And these numbers follow a loss of four million manufacturing jobs since the turn of the century.

Automation took off during the pandemic, too. That could limit the number of manufacturing jobs available when factories reopen.

Only time will tell.

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