US President Trump proposes stricter Buy American rules

United States President Donald Trump signed an executive order on Monday July 15 aimed at maximizing the use of American-made products and materials, the third pillar of his “Buy American, Hire American” plans.

This order, which is based on two previous executive orders, proposes to strengthen the Buy American Act by reducing the threshold for the amount of foreign material that can be used in an end product. The previous orders - “Buy American and Hire American” (order 13788) and “Strengthening Buy American Preferences for Infrastructure Projects” (order 13858) - were issued on April 18, 2017, and January 31, 2019, respectively.

Under the new order, iron and steel end products would be considered of foreign origin if the cost of the offshore material constitutes 5% or more of the cost for all materials used, the White House said in a release issued on Monday. For all other end products, that number would fall to 45%.

Existing Buy American regulations consider a product of foreign origin if the offshore material comprises 50% or more of the cost of all products used.

The White House directed the Federal Acquisition Regulatory Council to consider proposing these measures for notice and public comment within 180 days of issuance of the order.

“Strong domestic procurement preferences for federally funded infrastructure projects are vital to the health of the domestic steel industry, and have helped create manufacturing jobs and build American infrastructure. We applaud President Trump for once again affirming his commitment to the steel industry that built, and continues to build, our nation,” American Iron and Steel Institute president and chief executive officer Thomas J. Gibson said in a statement on July 15.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US, was calculated at $27.52 per hundredweight ($550.40 per short ton) on July 15, marking a one-month high for the index. The price last exceeded this level on June 12, when the index was calculated at $27.89 per cwt.

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