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President Donald Trump signed the “Buy American, Hire American” executive order Tuesday at a factory in Wisconsin, pushing forth his efforts to bolster American companies trying to obtain federal contracts and discourage foreign labor.
The two-spoked approach includes altering 1) the procurement laws associated with federally funded projects and 2) the immigration policies that permit immigrants to work in the United States.
But some analysts are knocking Trump's executive order as a publicity stunt, and by the looks of it, the executive order isn't expected to have much impact for at least seven months.
The executive order's first directive — “buying American” — aims to discourage foreign business contracts for American federal projects. It is an attempt to prioritize American materials/manufactured goods (ex. steel procured in the United States) used for and American firms bidding on federal contracts.
But the Buy American Act of 1933 already did something similar. The Trump administration argues that current exceptions made to federal agencies when domestic companies are outbid need to be reigned in. According to the Associated Press, currently:
Under several free-trade deals — including the World Trade Organization's Agreement on Government Procurement — contractors from 59 countries have the right to be treated the same as U.S. companies when it comes to many federal contracts.
Still, a sudden rule is not being implemented in the case of “buying American.” Rather, the White House has directed Commerce Secretary Wilbur Ross to review regulatory actions to strengthen the country's current approach to foreign contracting. That review has a 220-day deadline.
Through the “hiring American” directive, which, in part, aims to alter the way H-1B visas are dispersed, the executive order will crack down on fraud and abuse of the program and will likely get rid of its lottery component.
Currently, H-1Bs admit 85,000 new workers each year and are meant for highly skilled workers, especially tech workers. In addition, several more people renew their H-1Bs or bypass the 85,000 cap though exempt nonprofits and academic institutions.
However, through the order, the dispersement of H-1Bs will require different departments within the administration to offer up their recommendations. Then those recommendations will have to head to Congress in order to be implemented. Sarah Pierce, an associate policy analyst at the Migration Policy Institute, told Independent Journal Review that this is where she sees a potential legislative battle:
“I think it will definitely be a struggle. The H-1B visa program hasn't had any serious changes come from Congress since 1990. It's one reason why there's always a lot of people complaining about that 85,000 cap, because that was set in 1990, so that's almost 30 years old. So it's a little bit arbitrary and not reactive to the market at all. And in general, Congress has seriously struggled for over a decade now to reform the immigration system. And I think it's probably unrealistic to think that congress would make a change to the H-1B visa program and ignore the many other immigration-related issues Congress has on its list to reform.”
“There's not much you can draw from this,” Pierce added. “I think the administration is using this as a public relations tool to say, 'This is an issue where we're worried about and this is an issue we're working on.'”
Trump administration officials also bolstered the order as a bipartisan move delivering on a campaign promise.
Speaking to reporters at the White House the evening prior to Trump's appearance in Wisconsin, a senior administration official suggested that the executive order served a purpose that also aides traditionally Democratic groups, saying, "Those are two very specific policy positions that have long been advocated by many groups that represent workers in our country in particular by many labor unions and labor groups in our country.
“For the first time, each agency may also consider the effect of foreign-sourced dumped or injuriously subsidized content in the determination of the low bid,” the senior official added. “It is simply unfair for government contracts to be awarded to low bidders that use dumped or injuriously subsidized foreign-source content to push out the domestic producers.”
But prior to the election, Trump was criticized for his use of the H-1B program to hire cheap labor at his properties. He acknowledged problems with the process and said it should be ended altogether:
“I know the H-1B very well. And it's something that I, frankly, use, and I shouldn't be allowed to use it. We shouldn't have it. Very, very bad for workers. And second of all, I think it's very important to say, well, I'm a businessman and I have to do what I have to do. When it's sitting there waiting for you, but it's very bad. It's very bad for business in terms of — and it's very bad for our workers and it's unfair for our workers. And we should end it.”
The impact this order will have on foreign business relations, as well as its impact of small businesses within the United States, is still unclear. Until Secretary Ross and different agencies provide their recommendations — which won't conclude until much later this year — implementation cannot begin and impact cannot be assessed. And by the looks of it, Congress may face some hurdles before getting the immigration portion to the president's desk.