Buy American Act

Congress passed the Buy American Act on March 3, 1933, during the Great Depression, to keep federal purchasing dollars at home. It requires agencies buying goods for use in the United States to buy domestic products, with exceptions when American goods are unavailable, cost unreasonably more, or would be inconsistent with the public interest. Related laws such as the Berry Amendment for military food and clothing and Buy America rules for transit and highway grants apply similar preferences.

To count as domestic, a manufactured product must be made in the United States, and a set share of the cost of its components must also be American. A rule issued in 2022 raised that share from 55 percent to 60 percent, then to 65 percent in 2024, with 75 percent scheduled for 2029. When agencies compare bids, they add a price penalty to foreign offers. The 2021 infrastructure law extended Buy America rules to federally funded infrastructure projects run by states and local governments.

Trade agreements waive the preference for products from about 60 countries on large purchases, so many foreign goods still compete for federal contracts. Agencies grant waivers often, and an online portal created in 2021 publishes proposed waivers for public comment. Supporters say the rules protect American jobs and supply chains, while critics say they raise costs for taxpayers, invite retaliation against American exporters, and are hard to enforce when products are assembled from parts made worldwide.