Steel applauds Biden’s ‘Buy America’ order
Steelmakers in the United States and the United Steelworkers union applauded President Joe Biden’s plan to sign an executive order intended to strengthen “Buy America” laws.
“We are pleased by the President’s action today,” Steel Manufacturers Association (SMA) president Philip K Bell said in a statement. “Executive orders, rulemaking and Congressional legislation should continue to focus on enhancing ‘Buy America’ in ways that benefit American workers and companies.”
The executive order will require government agencies to close loopholes in the way domestic content is measured and boost domestic content requirements. It also will increase the price preference for domestic goods – the price difference that the government can pay over that for material from a non-US producer.
Biden aims to bolster oversight of potential waivers to domestic preference laws. The executive order, due to be signed on Monday January 25, creates a central review of agency waivers to “Buy America” requirements.
“We are pleased that [Monday’s] executive order will tighten up the process for considering waivers to existing domestic preference requirements and will also increase domestic content requirements for defining what constitutes a product that is made in the United States,” Kevin Dempsey, president and chief executive officer of the American Iron and Steel Institute, said in a statement.
The order will create a new position in the Executive Office of Management and Budget that will be responsible for implementing Biden’s push on federal procurement. Agencies will be required to report on their implementation of “Buy America” laws and make recommendations for achieving these goals, and to continue to do so twice a year.
The executive order reiterates Biden’s support for the Jones Act, which regulates maritime commerce and requires cargo between US ports to be carried only by vessels built, owned and operated by American citizens or permanent residents.
“[Monday’s] order strengthening domestic content requirements, closing loopholes in how domestic content is measured and calling for stricter enforcement of existing legislation - like the Jones Act - is an important step toward revitalizing our manufacturing base, as well as protecting and creating thousands of good, family sustaining jobs,” USW International president Tom Conway said in a statement.
The steel industry also cheered when former President Donald Trump signed a “Buy American, Hire American” executive order on April 18, 2017. Trump’s order was supposed to crack down on the use of waivers and exceptions for “Buy America” laws by requiring federally funded infrastructure projects to use steel “melted and poured” in the US.
The steel industry projects that the executive order signals that the Biden administration’s upcoming infrastructure bill will benefit domestic producers and workers.
“Our nation is long overdue for serious, robust investment in our crumbling infrastructure,” Conway said. “[Monday’s] action is crucial not only for rebuilding our nation’s broken economy and making our country safer, but for laying a foundation so that all of the work that stems from this investment supports American jobs.”
This could signal that the Biden administration will continue the protectionist measures that helped bolster domestic steel prices during the Trump era. The previous administration implemented Section 232 tariffs in 2018, imposing duties on imports on steel and aluminium of 25% and 10% respectively.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $55.04 per hundredweight ($1,100.80 per short ton) on January 22, down by 0.8% from $55.51 per cwt the previous day. HRC reached $58 per cwt on January 14, the highest level on record since Fastmarkets started covering this segment of the domestic steel market in 1960.