Biden’s ‘Buy American’ order likely to have little impact on Canadian firms, but U.S. stimulus may lift their fortunes
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The Buy American Act dates back to 1933, and put measures in place to ensure that U.S. taxpayer dollars support the U.S. economy — although exactly how to do so has been a challenge as the economy has become more and more global in nature.
Today, the U.S. federal government awards an estimated US$600 billion in goods and services contracts every year.
During his campaign for president, Biden had promised to protect U.S. manufacturing jobs and in a press release on Monday, he said his order means “that when the federal government spends taxpayer dollars they are spent on American-made goods by American workers and with American-made component parts.”
It’s not as if this is brand spanking new for Canadian business
Doug Porter, chief economist, BMO Capital Markets
The order also creates a new agency to review all waivers of the Buy American requirement, and which will publicly report the details of any waivers.
Waivers should only be “used in very limited circumstances — for example, when there’s an overwhelming national security, humanitarian or emergency need,” Biden said.
While that appears to draw a clear line in the sand, which would restrict Canada from any fiscal stimulus measures, there’s always a chance it may not.
The Conservative party’s international trade critic, British Columbia’s MP Tracy Gray, has pointed out that a decade ago, Stephen Harper’s government won waivers for Canada from the Buy American Act, and she urged Prime Minister Justin Trudeau’s Liberal government to push for a similar exemption.
“Canada and U.S. trade are closely tied — but this Buy American plan puts our mutual economic recovery at risk,” she said in a statement.
