Under this plan, officials at the Department of Commerce and the Department of Defense will identify goods and inputs they determine to be critical for our national security and essential for the protection of our industrial base. These goods would then become subject to a new local content requirement: if companies want access to the American market for these critical and essential goods, then over 50 percent of the value of those goods they sell in America must be made in America. Companies will have three years to comply, and can receive targeted, temporary waivers if they need more time to reshore production. In effect, the legislation applies the domestic sourcing principles of the Buy American Act — a law that governs federal government procurement — to the entire commercial market.
When it comes to our most critical goods, this “majority-made” standard is just common sense and harder to game than more complicated rules. And the requirements of this standard will be enforced with a compliance mechanism that closely mirrors one of the nation’s oldest trade remedy regimes: anti-dumping. Under my proposal, domestic producers can petition the U.S. International Trade Commission if they suspect that corporations or importers have violated the local content requirement, and the secretary of commerce can take enforcement actions such as civil penalties following an investigation to ensure the new standards are met.
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