Trump Executive Order Aims to Increase Domestic Steel Content in Federal Procurement

The U.S. steel industry applauded the president’s latest executive order, which targets the augmentation of the percentage of domestic steel content — among other goods — in federal procurements.
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On Monday, July 15, the president signed a proclamation hailing this “Made in America Week,” and also signed an executive order aimed at “maximizing use of American-made goods, products, and materials.”
The order strengthens the requirements under the Buy American Act — originally passed in 1954 during the Eisenhower administration — for federal agencies to buy American-made goods.
According to White House trade adviser Peter Navarro, the order would increase the threshold for domestic content of iron and steel from 50% to 95%, Reuters reported.
The order directs the Federal Acquisition Regulatory Council to, within 180 days, consider proposing an amendment to the Federal Acquisition Regulation (FAR) that would dictate materials be considered of “foreign origin” if “the cost of foreign iron and steel used in such iron and steel end products constitutes 5 percent or more of the cost of all the products used in such iron and steel end products.”
For all other products, the threshold for foreign origin would be applied if “the cost of the foreign products used in such end products constitutes 45 percent or more of the cost of all the products used in such end products.”
“The philosophy of my administration is simple. If we can build it, grow it or make it in the United States, we will,” Trump was quoted as saying by the Associated Press.
Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), praised the move.
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“This announcement is another positive step in ensuring the fullest possible implementation and enforcement of existing domestic procurement laws and ensuring the steel industry remains competitive,” he said in a prepared statement. “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.”
In an effort to boost the domestic steel sector, the Trump administration invoked Section 232 of the Trade Expansion Act of 1962 last year to impose tariffs of 25% and 10% on steel and aluminum, respectively. Since then, the U.S. steel sector’s capacity utilization rate has trended upward.
According to AISI, the U.S. steel sector’s capacity utilization rate hit 81.1% for the year through July 13, up from 77.0% for the same period in 2018. Production for the aforementioned year-to-date period hit 52.3 million tons, up 5.2% on a year-over-year basis.