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Trump EO lays out ‘buy American, hire American’ policy

By Pamela Wolf, J.D.

On April 18, President Donald Trump issued an executive order declaring it the policy of the United States to “buy American and hire American.” This means that it is officially the policy of the executive branch “to maximize, consistent with law, through terms and conditions of Federal financial assistance awards and Federal procurements, the use of goods, products, and materials produced in the United States.” It also means that it is now the policy of the executive branch to “rigorously enforce and administer the laws governing entry into the United States of workers from abroad, including section 212(a)(5) of the Immigration and Nationality Act.”

According to the Executive Order on Buy American and Hire American (EO), the “buy American” policy is aimed at promoting economic and national security and helping to stimulate economic growth, create “good jobs at decent wages,” strengthen the middle class, and support the American manufacturing and defense industrial bases.

The “hire American” policy would purportedly “create higher wages and employment rates for workers in the United States” and “protect their economic interests.”

Why do we need reform?According to the White House, the rules associated with America’s trade deals and its immigration policies unfairly put American companies and workers at a disadvantage. The White House pointed to a February 2017 report by the Government Accountability Office that suggests the United States is not getting its fair share of the global government procurement market through the World Trade Organization (WTO) Agreement on Government Procurement. Data from 2010, the most recent available, shows that while foreign-owned firms obtained $837 billion in contracts from the U.S. Government, American-owned firms received only $381 billion from the next five largest countries with which the United States has trade agreements.

The White House also said that unfair visa rules hurt American workers, naming specifically H-1B visas, which “are supposed to bring the highest skilled and paid labor to the United States.” According to studies, however, 80 percent of the approved applications were for the two lowest wage levels permitted. Companies “routinely abuse the H-1B visa program by replacing American workers with lower-paid foreign workers,” the White House said.

“Hire American” directive. On the “hire American” front, the EO requires the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security, as soon as practicable and consistent with applicable law, to propose new rules and issue new guidance to protect the interests of U.S. workers in the administration of the U.S. immigration system, including through fraud and abuse prevention. Those new rules and guidance would supersede or revise previous rules and guidance to the extent appropriate, the EO says.

Also, as soon as practicable, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security must suggest reforms “to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

“Petition beneficiaries” refers to aliens that are petitioned for by employers to become nonimmigrant visa holders with temporary work authorization under the H-1B visa program.

“Buy American” directive. As to “buy American,” the EO, among other things, directs federal agencies to scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers consistent with applicable law. Within 150 days, the heads of agencies are required to:

  • 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, to the extent permitted by law, 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 term “Buy American Laws” refers to all statutes, regulations, rules, and Executive Orders relating to federal procurement or federal grants, including ones that refer to “Buy America” or “Buy American,” requiring or providing preference for the purchase or acquisition of goods, products, or materials produced in the U.S., including iron, steel, and manufactured goods.

Additional requirements address guidance to help federal agencies make these assessments, assessments of free trade agreements, and agency reporting. 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 must submit to the President a report on Buy American that includes certain findings. The report must be submitted within 220 days of the EO’s entry and must include specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs.

Is the EO necessary? A press pool report by S.V. Date, Senior White House Correspondent for The Huffington Post, indicated that Trump Political Advisor Stephen Miller was asked why the EO was necessary, as it appears many if not all of its provisions could have been accomplished without one. Miller declined to answer, however. It’s a good question.

H-1B efforts already ramped up. On the H-1B issue, the Labor Department announced on April 4 its plans to protect American workers “against discrimination” by:

  • Rigorously using all of its existing authority to initiate investigations of H-1B program violators, which will also involve 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 (LCA) for future application cycles. The LCA, which is 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.
  • Continuing to engage stakeholders on how the program might be improved to provide greater protections for U.S. workers under existing authorities or through legislative changes.

On April 3, U.S. Citizenship and Immigration Services (USCIS) announced multiple measures to deter and detect H-1B visa fraud and abuse, including through targeted site visits. As of April 3, USCIS started focusing on:

  • Cases where USCIS cannot validate the employer’s basic business information through commercially available data;
  • H-1B-dependent employers (those who have a high ratio of H-1B workers as compared to U.S. workers, as defined by statute); and
  • Employers petitioning for H-1B workers who work off-site at another company or organization’s location.

These targeted site visits will permit USCIS to focus resources where fraud and abuse of the H-1B program may be more likely to occur and determine whether H-1B-dependent employers are evading their obligation to make a good faith effort to recruit U.S. workers. USCIS said it will continue random and unannounced visits nationwide.