Changing Supply Chains Make 'Made in USA' Determination, Promotion Policies Difficult, CRS Says
Changes in the structure of manufacturing make it difficult to tie products to a single country of origin and design government policies that support U.S. manufacturing, according to a recent Congressional Research Service report (here). The report, which also outlines various agencies' interpretations of "Made in the U.S.A.," mentions President Donald Trump’s April 18 executive order instructing agencies to ensure federal grants and procurement maximize the use of manufactured goods produced in the U.S. (see 1704180021). Physical transformation of goods is increasingly performed by workers not classified as manufacturing workers, and a growing proportion of workers whose jobs are related to manufacturing work in sectors not directly involved in physical transformation, such as business services, software development and after-sales service, the report says.
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Further, federal manufacturing supports rest on the questionable premise that every manufactured product is wholly made in the U.S. or overseas, even though manufacturers widely combine raw materials, components, services and intellectual property from several countries into one finished manufactured good, CRS says in the report. At fixed cost levels, domestic content requirements reduce the volume of procurement, putting downward pressure on employment in nonmanufacturing industries like construction and freight transportation, the report says. The White House didn't comment.