Canada seeking exemptions from Biden's 'Buy American' provisions

Canada will seek exemptions to the Biden administration's effort to make U.S. federal agencies buy American-produced goods, Prime Minister Justin Trudeau said on Tuesday, as Canadian business groups expressed concerns about the potential impact.

Canada will seek exemptions to the Biden administration's effort to make U.S. federal agencies buy American-produced goods, Prime Minister Justin Trudeau said on Tuesday, as Canadian business groups expressed concerns about the potential impact. President Joe Biden vowed on Monday to leverage the U.S. government's massive purchasing power to strengthen domestic manufacturing by clamping down on foreign suppliers. That move could hurt Canada, given how tightly the two nations' economies are integrated.

Asked whether he would seek exemptions to the "Buy American" program when it is unveiled, Trudeau told reporters: "We will continue to be effective in advocating for Canada's interests with this new administration." Many U.S. companies have Canadian suppliers who risk losing business depending on how tightly the new rules are applied. Under a similar program launched by former President Barack Obama in the wake of the 2008 financial crisis, Canada managed to win some waivers after many months of talks.

Canadian officials already are talking to their American counterparts, a government source said, to "discuss the importance of two-way trade to both the U.S. and Canada, and the nature of our shared supply chains". The Biden administration's "Buy American" initiative directs federal agencies to re-evaluate the threshold used to determine U.S. content to prevent companies that sell to the government from importing largely foreign-made goods and selling them as U.S.-made after making minor tweaks.

"We are obviously concerned this could impact Canadian companies that work in the United States," said Dennis Darby, the chief executive officer of Canadian Manufacturers and Exporters. Canada must "push to make sure we get those waivers," he said by phone.

Trudeau noted he had often successfully lobbied former U.S. President Donald Trump's "unpredictable and protectionist" administration. With Biden, there is more common ground, he said, even though the new president canceled an oil pipeline project backed by Canada on his first day in office last week. "President Biden has a lot of similar priorities to this government, to Canadians," Trudeau said.

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