Source: Blog – Alliance for American Manufacturing
An Amtrak Acela train is assembled at the Alstom production facility in Hornell, N.Y. in 2022. | Getty Images
The second in an occasional series of AAM policy recommendations as a new era in Washington begins.
A direct line can be drawn from investments in reliable infrastructure to the competitiveness of our manufacturing base. American manufacturers benefit from a more efficient network to move goods to market and the opportunity to supply the products and materials used to build highways, water systems, and other critical public works.
That’s what made the 2021 Infrastructure Investment and Jobs Act (IIJA) such a big deal: After years of neglect, our nation’s public works infrastructure system was finally given the attention it deserved. The bill dedicated a trillion dollars, including $550 billion in new funding, to refurbish aging assets and construct the new ones needed for American businesses to compete in the global economy.
What made the IIJA especially impactful, though, was its inclusion of the Build America, Buy America Act (BABA), a robust enhancement of domestic content preferences applied to federal aid infrastructure spending. In addition to the traditional highway and transit systems that pre-existing Buy America laws covered, BABA expands the preference for all public works infrastructure projects supported by the taxpayer. The law enhances coverage to include products and materials beyond just iron and steel, creating powerful market signals to drive capital investment in other U.S. industries and their upstream supply chains. And, to address a myriad of loopholes and exceptions that have weakened Buy America rules in the past, it adds necessary transparency and accountability when waivers are needed to overcome short-term market limitations.
BABA increases the positive economic impact infrastructure investments already deliver, ensuring the benefits are felt by U.S. manufacturers and their workers. One estimate attributes 1.8 million jobs created annually to IIJA spending, which follows an earlier analysis finding a 33 percent increase in manufacturing jobs created when domestic content use is maximized.
That’s because Buy America creates powerful market signals for companies to do their work here. Hornell Alstrom increased production at its railcar factory in New York thanks to Buy America, for example, while Corning has announced hundreds of new jobs at a planned fiber optic factory in Arizona and another in North Carolina. Investments in broadband infrastructure, coupled with the Buy America preference, have in turn spurred sizeable investments throughout the sector’s supply chain, creating more than 2,200 jobs.
For American workers to fully benefit from this new Buy America law, however, federal agencies must fully implement it and avoid creating new loopholes. What’s more, agencies must adhere to Congress’ directives to eliminate loopholes and avoid issuing broadly applied waivers that have bypassed U.S. companies and their workers for decades. Every unnecessary or excessive waiver that diminishes Buy America coverage and each loophole left open is a market signal that undermines incentives for domestic manufacturing investment.
It is the clear policy of the United States under congressional enactments and various executive orders to Buy American. Still, it will take vigilance to ensure BABA’s rules are followed. Moreover, infrastructure investment must keep pace with the clear needs of our nation. The IIJA authorization extends until 2026, making the reauthorization of infrastructure programs an immediate action item for Congress. In the meantime, the Trump administration has an opportunity to advance BABA implementation to the benefit of U.S. manufacturers and their workers.
Policy Recommendations
1. Reauthorize surface transportation programs before they expire in late 2026 with the identification of long-term, robust funding solutions.
2. Keep our Buy America laws strong by rejecting special interest lobbying efforts to restore access to products and materials imported from China and other foreign countries.
3. Accelerate BABA implementation at departments and agencies that continue to delay following the law more than three years after enactment, paying particular attention to “deficient” programs where BABA is not fully applied.
4. Cut down on the number of broad, nationwide “general waivers” of Buy America that bypass U.S. companies and their workers and undermine market signals for U.S. investments; instead, prioritize the use of ad hoc project-specific waivers and, if necessary, “general waivers” that are narrow, time-limited, and transparent.
5. Discontinue the FHWA’s 1983 “general waiver” of manufactured products, which under a “transition period” established under the Biden administration is not set to fully expire until October of 2026.
6. Increase federal agency transparency of Buy America waivers using the MadeinAmerica.gov website as a tool to highlight investment opportunities for companies seeking to fill U.S. supply chain gaps.
7. Accelerate the timeline for agencies to evaluate and issue ad hoc, project-specific waivers by ensuring sufficient resources for administration of Buy America laws.
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