Biden’s ‘Buy American’ Promise Is a Lot More Complicated and Bureaucratic Than It Seems

On the surface, it might appear that so-called “Buy American” rules, like the ones President Joe Biden has promised to tighten as part of a push to promote domestic manufacturing, are pretty straightforward.

A product either comes with a “Made in the USA” sticker or it doesn’t, right?

Unfortunately, it’s not that simple. To qualify under federal “Made in America” rules, a product must have at least 60 percent of its component parts manufactured in the United States. The Biden administration raised the threshold from 55 percent last year, and further increases—up to 75 percent by 2029—have been outlined by the White House.

But what counts as a finished product or a component part is open to interpretation—and the process is time-consuming, bureaucratic, and full of opportunities for domestic companies to leverage the power of the federal government against potential competitors.

Take for example what happened when the Metropolitan Transportation Authority (MTA), which operates the subway systems and other forms of mass transit in New York City, tried to buy a fire-suppression system from Finland in 2011. At the time, the MTA was in the process of building a new subway line under Second Avenue in Manhattan. Because the project was partially funded with federal dollars, the federal “Buy American” mandate applied.

By that point, the MTA had already gone through several rounds of bureaucratic approvals over the construction of the station. In 2010, for example, the agency had asked the Federal Transit Administration (FTA) to clarify whether an escalator in one of the stations on the new line was a “manufactured end product” or a component of the larger station project. The FTA responded by saying that the “escalator was a component of the larger transit facility and that the transit facility was the manufactured end product.” As long as the whole facility was comprised of 55 percent American-made components, it would be compliant with the law.

Using that same logic, the MTA assumed that the fire suppression system—which, like an escalator, is both full of component parts and a component with