The U.S. ambassador to Canada says U.S. President Joe Biden was referring to exclusively American — not North American — construction materials when he announced new Buy American rules for infrastructure projects in his State of the Union speech last week. But David Cohen insists the impacts on Canadian industries won’t be as significant as some fear.
Cohen said in an interview airing Sunday, it’s “pretty clear he meant America” when Biden doubled down on his proposed ‘Buy American’ approach to infrastructure projects.
“But it’s absolutely essential that I make the point and reinforce it: that we are talking about federal infrastructure spending under the Bipartisan Infrastructure Act,” Cohen said. “We are not talking about the massive volume of trade that occurs between the United States and Canada, and in which Canadian companies compete.”
He added the new proposed rules also wouldn’t apply to the “free trade environment” between Canada and the United States.
The Bipartisan Infrastructure Act — which was passed and became law in the U.S. in November 2021 — revises part of the 1933 Buy America Act, which lays out rules for transportation infrastructure projects.
Biden in his State of the Union speech highlighted the implementation phase of the Bipartisan Infrastructure Act, and introduced new rules that will require all construction materials used on federal infrastructure projects to be made in America using American products.
“We’re going to buy American, folks,” Biden said on Tuesday. “And it’s totally consistent with international trade rules. Buy America has been the law since 1933, but for too long, past administrations, Democrat and Republican, have fought to get around it. Not anymore.”
“Tonight I’m announcing new standards require all construction materials used in federal infrastructure projects to be made in America,” he also said, adding the rules would apply to lumber, glass, drywall, and fiber optic cable, while “American roads, bridges, and American highways are going to be made with American products as well.”
But Canadian manufacturers were quick to raise concerns about the potential impacts of such policies. Canadian Manufacturers & Exporters — the country’s largest trade and industry association — tweeted that the policies are “bad news for Canadian manufacturing and integrated North American supply chains.”
“A strong response is needed to push back and protect Canadian access to the U.S. procurement market,” the organization also tweeted.
Canada’s ambassador to the U.S. Kirsten Hillman told Kapelos on Wednesday Canada is “not in a position of achieving assurances at this point” that there will be a carve in for Canadian producers in Biden’s new rules.
“We’re very clear that these policies don’t make sense in the context of the Canada-U.S. economic relationship, and frankly, in the context of us right now wanting to make sure that our critical supply chains are resilient, that we are depending on our best allies, to make sure that our economies are strong,” she said. “We’re making all of those arguments in private and in public.”
Cohen meanwhile downplayed some of the concerns from the Canadian business community, insisting spending under the Bipartisan Infrastructure Act is a fraction of the U.S-Canada trade economy.
“Again, I have to reinforce that when I see representatives of the Canadian business community, they’re worrying about the potentially ruptured supply chain, but I don’t think they understand what’s going on here,” he said.
Cohen said he can’t ensure there will be an exception for Canada in the new rules, but he said there will surely be a “productive dialogue, as there always is.”
“I understand the concern,” Cohen said. “But I think you have to put it in the context of the overall trade relationship, the overall volume of trade, and the fact that the president’s not talking a structure of protectionist provisions that would limit access of Canadian businesses to the private sector market in the United States. That could have a significantly higher impact than a program limited just to federal infrastructure investment.”
“And I understand the give and take and the tension, but I’m trying to provide some context as to the relatively small numbers in the overall trade relationship here,” he also said.
Biden is set to embark on his first official state visit to Canada next month. In the meantime, it’s unclear when the specifics of the new Buy American rules could be announced.