In 1983, FHWA waived requirements that manufactured products used on federal-aid highway products be made in the U.S. But a new rule will change that.
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Starting October 1 of this year, tighter restrictions will go into effect limiting how foreign-manufactured products can be used on federal-aid highway projects.
The U.S. Department of Transportation's Federal Highway Administration, in one of its last actions under the Biden administration, announced a new rule limiting a longstanding general waiver that had provided a loophole for the use of foreign-manufactured products.
FHWA has long required that federal-aid projects use steel, iron and manufactured products made in the U.S., commonly referred to as “Buy America” requirements. In 1983, however, FHWA decided to waive this requirement for manufactured products – apart from predominantly iron or steel components of manufactured products – as it determined these products were “used in insufficient quantity on highway construction projects to incentivize domestic manufacturing,” according to FHWA.
“This new rule reverses decades-old policy that effectively allowed the use of taxpayer dollars to purchase foreign products for U.S. transportation purposes," said Acting Federal Highway Deputy Administrator Gloria M. Shepherd. “American businesses now have a unique opportunity to take advantage of the broader federal government market.”
This new rule establishes new Buy America standards regarding manufactured products. Specifically, manufactured products must be assembled in the U.S. and at least 55% of its components by cost must be mined, produced or manufactured in the U.S.
FHWA stated the “final assembly” rule will go into effect for federal-aid projects on October 1 of this year, while the “55% components” requirement will go into effect October 1, 2026.
The full rule from FHWA can be found here.
Former President Joe Biden had first announced his administration’s intent to discontinue the Buy America general waiver in his 2024 State of the Union address.
