President Joe Biden signed an executive order on Monday that tells the federal government to “buy American” and works toward reviving U.S. manufacturing (one of his campaign promises).
What you need to know: If you’re feeling deja vu, that’s because former President Donald Trump aimed to do the same thing with his own “Buy American, Hire American” EO in 2017. And federal law has required the gov to favor buying domestic goods for decades. Now, Biden is pushing to close loopholes and toughen up on enforcing the made-in-America rules.
Your move: Since this EO only sets clear rules about what the gov should buy, it won't directly impact your own shopping. But learning how the new admin’s decisions affect the country overall can help give you an idea of what could come next.
It could boost the job market. At least that’s the idea. When the gov purchases goods and services (think: cars, construction materials, medical gowns) from American companies versus foreign ones, it keeps money in the US instead of sending it abroad. In theory, higher demand for American goods would lead to more jobs. But some economists say these kinds of policies don’t make much of an impact. And purchasing more domestic goods could raise costs and upset foreign allies.
It could bring manufacturing back. Right now, the industry accounts for almost 12% of the US economy. And this EO aims to increase that share. Biden says the gov will get the ball rolling by replacing its fleet of vehicles with American-made electric cars over time. That could be good news for Ford, Tesla, and other US manufacturers. Good news for American companies means good news for the economy.
theSkimm: President Biden’s “Buy American” executive order echoes what previous admins have tried to do, but weren’t able to fully execute: bring back US manufacturing to create more jobs and boost the economy. TBD if it’ll work this time.
Sign up for our Skimm Money newsletter for more on the biggest financial headlines and trends, and how they affect your wallet.
Skimm'd by: Ivana Pino, Stacy Rapacon, and Elyse Steinhaus