"Buy American and hire American" is the message underlying an Executive Order signed by President Donald J. Trump on Tuesday.
“Rules associated with trade deals and immigration policies unfairly place American companies and workers at a disadvantage,” a statement from the White House said.
The Trump Administration cited a February 2017 report by the Government Accountability Office that suggests the U.S. is not getting its fair share of the global government procurement market through the World Trade Organization Agreement on Government Procurement. Data from 2010, the most recent year available, shows that while foreign-owned firms obtained $837 billion in contracts from the U.S. government, American-owned firms received just $381 billion from the next five largest countries with which we have trade agreements.
The Executive Order also addresses the H-1B visa program. “Currently, companies routinely abuse the H-1B visa program by replacing American workers with lower paid foreign workers,” the White House said. It also targets “the abusive use of waivers and exceptions that undermine ‘Buy American’ laws meant to promote taxpayer money going to American companies.”
In specifics, the Executive Order instructs every federal agency and department to conduct comprehensive assessments aimed at cracking down on weak monitoring, enforcement, and compliance efforts to strengthen “Buy American” policies. It also targets waivers and exceptions that have allowed foreign goods unfair advantages in U.S. government procurement.
The Executive Order demands that America’s involvement in the WTO’s Agreement on Government Procurement and other trade deals be reviewed to ensure they meet the President’s standards. “For the first time, the Buy American bidding process must take into account unfair trade practices,” it says.
Another provision promotes American-made steel by affirming the “melted and poured” standard for steel production in the U.S.
“Every agency shall scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law,” the order says.
Within 150 days of the date of this order, the heads of all agencies shall:
assess the monitoring of, enforcement of, implementation of, and compliance with “Buy American” laws within their agencies;
assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing; and
develop and propose policies for their agencies to ensure that federal financial assistance awards and federal procurements maximize the use of materials produced in the U.S., including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.
The Secretary of Commerce, in consultation with the Secretary of State, the Director of the Office of Management and Budget, and the U.S. Trade Representative are required to submit to the President a report on “Buy American.”
The report will be submitted within 220 days of the date of the order and include specific recommendations to strengthen implementation of “Buy American” laws, including domestic procurement preference policies and programs. Subsequent reports will be submitted by each agency head to the Secretary of Commerce and the Director of the Office of Management and Budget by Nov. 15 on an ongoing, annual basis.
The Secretary of Commerce will submit an annual report based on these submissions beginning Jan. 15, 2019.
To the extent permitted by law, before granting a public interest waiver from “Buy American” laws, each relevant agency shall “take appropriate account of whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel…and it shall integrate any findings into its waiver determination as appropriate.”
“Ensuring the integrity of the immigration system in order to ‘hire American,’” is also addressed in the Executive Order. The Secretary of State, Attorney General, Secretary of Labor, and Secretary of Homeland Security “shall propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of U.S. workers in the administration of our immigration system, including through the prevention of fraud or abuse.”
In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security are directed to suggest reforms to the H-1B visa program.
The Executive Order follows announced plans by the Department of Labor “to protect U.S. workers from H-1B program discrimination” by mandating greater transparency and oversight.
The visa program in question allows employers to hire highly skilled foreign workers in specialty occupations. H-1B visas authorize the temporary employment of qualified individuals who are not otherwise authorized to work in the U.S.
“In recent years, some employers have used the H-1B program to hire foreign workers despite American workers being qualified and available for work or even to replace American workers,” the Labor Department wrote in an April 4 statement. It “fully supports the Department of Justice in cautioning employers who petition for H-1B visas not to discriminate against U.S. workers,” as well as the Department of Homeland Security’s “measures to further deter and detect H-1B visa fraud and abuse.”
A lottery, which began on April 3, provides the process by which companies claim the 85,000 visas allowed annually. The traditional April lottery remained in place for this year, despite fears the Trump Administration would eliminate it.
The Labor Department says it will “protect U.S. workers against discrimination” through the following actions:
Rigorously using all of its existing authority to initiate investigations of H-1B program violators.
Greater coordination with other federal agencies, including the departments of Homeland Security and Justice for additional investigation and, if necessary, prosecution.
Considering changes to the Labor Condition Application for future application cycles. The Labor Condition Application, a required part of the H-1B visa application process, may be updated to provide greater transparency for agency personnel, U.S. workers and the general public.
Engaging stakeholders on how the program might be improved to provide greater protections for U.S. workers, under existing authorities or through legislative changes.
More information about the Department of Labor’s foreign labor certification program can be found here; more information on enforcement of the nondiscrimination requirements of the H-1B program is available here.
An April 3 announcement by U.S. Citizenship and Immigration Services also detailed “multiple measures” to deter and detect H-1B visa fraud and abuse. It will take “a more targeted approach when making site visits across the country to H-1B petitioners and the worksites of H-1B employees.”
The Trump Administration should take a “mend it, don’t end it” Approach to H-1B visas, warns the Information Technology and Innovation Foundation, a leading U.S. science and tech policy think tank.
“Reforming the program could help improve its effectiveness in attracting the world’s best and brightest,” says its president, president, Robert Atkinson. “Continuing to do that is vital, because, as ITIF found last year, 46 percent of the most important U.S. innovators are immigrants or the children of immigrants.”
ITIF “welcomes proposals to make the program more effective.” For example, replacing the H-1B lottery with a more merit-based system could advance the program’s goals of attracting people with advanced STEM skills.
“We also welcome efforts to root out abuse, better enforce the existing rules, and increase the salary requirements, as long as we continue to welcome highly qualified STEM workers,” Atkinson says. “On the other hand, some of the ideas that have been suggested, such as requiring applicants to advertise job openings for an extended period of time to prove conclusively that no U.S. workers are available could be so onerous that it renders the program ineffective. We are talking about fast-moving industries. Companies get opportunities, and they have to jump on them. Delaying them for too long would be bad for innovation, job creation, and growth.”
Ending the H-4 visas that allow spouses of H-1B workers to also work here would reduce the quality of foreign applicants to the H-1B program while producing no benefits for U.S. workers, the group warned.