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President Trump Doubles Down on 'Buy American' Mandates

In an executive order signed January 31, 2019, President Donald Trump extended "Buy American" requirements to all infrastructure projects that receive federal financial assistance. These "domestic preferences" cover not only iron and steel, but also "manufactured products" containing aluminum, plastics, concrete, glass, and lumber.

This order may significantly affect the rights and opportunities of both foreign and domestic manufacturers and developers of infrastructure projects related to surface transportation, aviation, ports, water resources, electricity and energy production, generation, and storage, electricity and energy transmission or distribution systems, broadband internet, pipelines, stormwater and sewer infrastructure, drinking water infrastructure, and cybersecurity. Building on Executive Order 13788 (Buy American and Hire American Order), the order directs executive branch agencies to apply the explicit statutory authority in "Buy American Laws" to "maximize . . . the use of goods, products, and materials produced in the United States." Through this new order, the President has extended that system of explicit domestic preferences in two important ways.

First, the order extends the "Buy American" mandate to projects beyond the scope of existing "Buy American Laws" that establish a preference for U.S.-manufactured goods in the case of federal purchases and grants. In this regard, the order may be vulnerable to challenges that the President exceeded his statutory authority by imposing additional requirements beyond those identified by Congress.

The President's order requires that executive agencies "encourage" recipients of federal assistance to use domestically produced materials "in every contract, subcontract, purchase order, or sub‑award that is chargeable against such Federal financial assistance award." Agency leaders also are required to determine whether the programs they administer "would support . . . the imposition of a requirement" to use domestic iron, aluminum steel, cement, and manufactured products, holding out the prospect that "encouragement" to use domestic materials may give way to a "requirement" to do so.

Second, the order requires that these "Buy-American Principles" be applied to reach all infrastructure projects receiving any federal financial assistance. While the Buy American and Hire American Order applied to federal purchases and grants, the universe of projects receiving "federal financial assistance" is far larger, including projects receiving federal support in the form of loans, loan guarantees, interest subsidies, insurance, cooperative agreements, non-cash contributions or donations of property, direct appropriations, and food commodities.

Copyright © by Ballard Spahr LLP

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Brendan Collins Manufacturing Attorney
Partner

Brendan K. Collins is Practice Leader of the firm's Manufacturing Group. He is an environmental lawyer who devotes his practice primarily to clients in the electric power sector and the oil and gas industry. He has litigated civil, criminal and administrative matters in numerous state and federal courts, including the U.S. Supreme Court. He advises clients on permitting issues and regulatory matters, as well as government and regulatory affairs, where he counsels clients on current regulations, prepares comments on proposed regulations and, where necessary, litigates regulatory challenges...

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Scott Pearson, Ballard Spahr Law Firm, Los Angeles, Business Litigation Attorney
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Scott Pearson focuses his practice on the defense of regulatory enforcement actions and class actions, other complex business litigation, and regulatory compliance counseling. Martindale-Hubbell rates Mr. Pearson "at the highest level of professional excellence." He has been called "a true expert in complex litigation and consumer class actions" and "a no-nonsense bulldog lawyer who is highly respected by his peers and the judiciary."

Prominent companies regularly entrust Mr. Pearson with matters involving bet-the-company exposure or extreme complexity, such as overlapping claims being pursued simultaneously in multiple jurisdictions by federal regulators, state Attorneys General, and class action plaintiffs. He also serves as a trusted strategic business advisor, drawing on more than twenty years of experience. His clients include national banks and other financial services firms, institutional investors, sports and entertainment companies, retailers, and others.

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