Interview Series: Navigating 'Buy America' Under the Next Administration - Insights from Alan Chvotkin on Future Trade Policies

As part of our continuing dialogue on critical legal and business topics, today we cover the future of “Buy America” through an interview with Centre Law partner Alan Chvotkin.

Q: What are your predictions regarding the focus on the Buy America principles under the next president?

Alan: Both former President Trump and Vice President Harris have talked extensively and fervently about the need to “bring jobs back to the United States” or to “create good-paying union-filled jobs.” However, former President Trump used high tariffs and trade sanctions to primarily disrupt the supply chain of foreign goods as a means to incentive U.S. companies to “repatriate” or create jobs in the U.S., while President Biden has used direct funding (such as the Chips Act) or federal procurement policies to incentivize U.S. businesses to manufacture in the U.S. and hire U.S. labor. Both candidates have also sought to minimize the economic role of China in global trade, including within the U.S.  So, regardless of the election outcome, I’m confident that “Buy America” will remain a key economic pillar of the new administration, even if the tools used to implement those policies could differ significantly.

Q: Regarding the Trade Agreements Act, should its applicability be broadened to reduce the U.S. reliance on a non-compliant TAA country like China and instead move to a compliant TAA country like Bangladesh, which is a manufacturing powerhouse?

Alan: The Trade Agreements Act and U.S. regulatory and procurement policies already strongly disfavor using Chinese-manufactured products when purchasing for U.S. Government use by keeping China off the “designated country” list for Trade Agreement Act compliance. In addition, there are additional special U.S. Government prohibitions on purchasing products from Chinese military organizations, from Chinese telecommunications and video equipment manufacturers, and even for certain procurements from the Xinjiang Uyghur Autonomous Region. By contrast, Bangladesh has been on the TAA “designated country” list for a long time. Despite the low-cost (and even high quality) manufacturing capabilities in many of the TAA-listed “designated countries,” recent U.S. Government policy has been to look first to increase U.S. domestic sourcing and to improve the U.S. trade balance.

Q: Should waivers be granted for auxiliary components such as internet routers or EV chargers under the U.S. Buy America policy, considering the weakened domestic IT output in the U.S. compared to countries like China or India?

Alan: Most of the U.S. “Buy American” laws and regulations already provide for an agency waiver process based on public policy grounds, or on the non-availability of domestic delivery in a timely manner, or on a price-competitive basis, or due to insufficient quality. In my view, this waiver authority is absolutely appropriate and necessary. However, the Biden Administration has sought to reduce the number of waivers granted and to increase the visibility of waivers that are granted. If Vice President Harris is elected, I would expect this policy on minimizing waiver and maximizing transparency to continue. But whether internet routers or EV charges need and should be granted a short-term waiver in order to fulfill the U.S. domestic demand is best handled on a case-by-case basis through the existing waiver processing mechanisms.

At Centre Law, we have extensive experience working with companies seeking to comply with the numerous “Buy America” compliance policies and procedures.  If you have any questions or need any additional information, please do not hesitate to contact the author or the Centre Law attorney with whom you normally work.

This is part 2 of Sudarsanan’s Interview Series. Check out Part 1: Interview Series – Selling Emerging Technologies and Security Compliance with Brandon Graves if interested.