President Trump has announced a series of tariff initiatives, including proposed 25% tariffs on goods from Canada and Mexico, 10% tariffs imposed on goods from China (White House fact sheet), and proposed “reciprocal” tariffs on goods from nations that impose higher tariff rates.
When foreign goods are imported for sale to the U.S. government, if proper procedures are followed, the goods generally should be free from tariffs, per longstanding U.S. regulations. For information on U.S. agencies’ exemptions from tariffs in their procurements, see the analysis compiled here.
On February 21, 2025, GW Law’s Government Procurement Law Program held a webinar on rising U.S. and EU protectionism, which discussed recent caselaw in the EU Court of Justice and the Trump administration’s tariff initiatives.
King’s College London and GW Law will be presenting a free webinar on the European Commission’s “White Paper” on foreign government subsidies, which would impose new EU measures to address foreign subsidies, including in public procurement.
This year has seen an unprecedented rise in trade barriers – both direct and indirect – involving public procurement. Join a free 60-minute webinar sponsored by George Washington University Law School’s Government Procurement Law Program, to hear leading experts on emerging trade barriers affecting grants and procurement.
These measures, driven in part by the broadening role of foreign firms in the U.S. government’s supply chain, and in part by the specific challenges posed by Huawei and other Chinese high-technology firms to U.S. security, impose substantial compliance burdens on contractors and grantees in U.S. procurement. For many in the U.S. government, it would be “nothing less than madness to allow Huawei to worm its way into one’s next-generation telecommunications networks,” and Section 889 and parallel initiatives (such as the “Clean Network” initiative) are intended to shield the United States.
In practical terms, the Cybersecurity Maturity Model Certification (CMMC) and Section 889 may make it very difficult – if not impossible – for foreign vendors to compete in U.S. markets
In practical terms, the CMMC and Section 889 may make it very difficult – if not impossible – for foreign vendors to compete in U.S. markets, raising questions under the United States’ international free trade agreements and reciprocal defense procurement agreements. (The vulnerabilities in the U.S. government’s information technology supply chain are the subject of an upcoming GAO report, and a separate private-sector study is assessing barriers to procurement trade generally.) Although the Trump administration, bowing to industry pressure and the Defense Department’s concerns, extended the Section 889 implementation deadline to September 30, 2020 for Defense Department contractors, the compliance burdens remain quite serious.
Donald Trump in Ypsilanti, Michigan
Trump Administration’s “Buy American” Order for Medicines – and the Biden Plan: From its start, the Trump administration has adopted a broad range of “Buy American” measures, including a recent change to federal grants rules which says that grantees should, when possible, buy U.S. goods. Although even some supporters have criticized the Trump administration’s “Buy American” efforts as ineffective, Trump’s protectionist rhetoric has undoubtedly affected the international debate over free trade in procurement.
In response to the COVID-19 pandemic, on August 6, 2020 President Trump issued an executive order for “on-shoring” the manufacture of essential medicines bought by the U.S. government. The order calls for limiting U.S. market-opening commitments under the World Trade Organization (WTO) Government Procurement Agreement (GPA) and free trade agreements – a process which could trigger months of renegotiations with trading partners and result in limiting U.S. access to foreign markets. Jean Heilman Grier, former procurement negotiator at the Office of the U.S. Trade Representative, has written on the Executive Order.
Impact of the Pandemic: Of course controversial trade measures have been driven in part by the COVID-19 pandemic.
By Rosario “Charo” Gutierrez (USAF)
Robert Anderson co-wrote an article with Anna Mueller of the WTO on the constraints and flexibility afforded by the WTO’s Government Procurement Agreement. For their part, co-moderators Laurence Folliot Lalliot and Christopher Yukins co-wrote a piece in Concurrences, the competition periodical, on the pandemic’s lessons for international markets, including especially the pandemic’s disruptive effect on protectionism. While the pandemic exacerbated economic nationalism and trade barriers, the pandemic also pointed up the sometimes mortal dangers of cutting off international supply chains.
European Trade Measures: Roland Stein (of the BLOMSTEIN firm, Berlin) and Professor Michal Kania (University of Silesia/Poland) will discuss important developments in access to European procurement markets:
White Paper — Possible Exclusion of Subsidized Foreign Firms: Following on 2019 guidance from the European Commission to member states on abnormally low bids from vendors from outside the European Union, in June 2020 the Commission issued a white paper on “levelling the playing field as regards foreign subsidies.” The white paper launches an EU-wide consultation on how to address foreign subsidies which distort EU procurement markets; among other measures under consideration, member states might exclude vendors that receive foreign subsidies. The white paper notes that the EU continues to assess the proposed International Procurement Instrument, a measure which has received cautious support from European industry and which would allow member states to raise new barriers against vendors from nations (including potentially the United States and China) that do not cooperate in EU efforts to open procurement markets.
Exclusion for Non-Domestic Content: Article 85 of EU Directive 2014/25/EU, which governs utilities’ procurement, says that a bid may be rejected if more than 50% of the products being offered would come from nations that have not entered into a free trade agreement with the EU (such as China) – a rarely enforced restriction which, as codified in German law, was recently applied by an important German court, the Brandenburg higher regional court.
As a result of its January 2020 trade deal with China, under which the United States agreed to find new ways to stop counterfeit goods in online marketplaces, the Trump administration has stepped up its fight to stop counterfeit goods from China – and that fight may have a direct impact on a pending GSA procurement (no longer under protest) to open commercial online marketplaces to federal purchasers.
In a
recent piece,
Jason Miller of Federal News Network asked whether President Trump’s January
31, 2020 Executive Order, Ensuring Safe & Lawful E-Commerce for US
Consumers, Businesses, Government Supply Chains, and Intellectual Property
Rights, may affect the U.S. General Services Administration (GSA) “electronic
marketplaces” acquisition.
Counterfeit goods (photo: USCBP)
GSA’s “electronic marketplaces” procurement was previously stalled by a protest by Overstock.com at the U.S. Government Accountability Office (GAO). The grounds for that protest may never be known, since the protest was withdrawn on February 24, 2020. The “electronic marketplaces” procurement would allow federal officials (users – not necessarily contracting officials) to make billions of dollars in micro-purchases (generally below $10,000) directly from the awardee commercial e-commerce platforms.
President Donald J. Trump (Official White House photo by Shealah Craighead)
Section 1. Policy. E-commerce,
including transactions involving smaller express-carrier or international mail
packages, is being exploited by traffickers to introduce contraband into the
United States, and by foreign exporters and United States importers to avoid
applicable customs duties, taxes, and fees.
* * * *
It is the policy of the United States Government that any person
who knowingly, or with gross negligence, imports, or facilitates the
importation of, merchandise into the United States in material violation of Federal
law evidences conduct of so serious and compelling a nature that it should be
referred to U.S. Customs and Border Protection (CBP) of the Department of
Homeland Security for a determination whether such conduct affects that
person’s present responsibility to participate in transactions with the Federal
Government.
It is the policy of the United States Government, as reflected
in Executive Order 12549 of February 18, 1986 (Debarment and Suspension), and
elsewhere, to protect the public interest and ensure the integrity of Federal
programs by transacting only with presently responsible persons. In
furtherance of this policy, the nonprocurement debarment and suspension system
enables executive departments and agencies to exclude from Federal programs persons
who are not presently responsible. CBP implements this system by
suspending and debarring persons who flout the customs laws, among other
persons who lack present responsibility. To achieve the policy goals
stated herein, the United States Government shall consider all appropriate
actions that it can take to ensure that persons that CBP suspends or debars are
excluded from participating in the importation of merchandise into the United
States.
It is the policy of the United States Government that express consignment operators, carriers, hub facilities, international posts, customs brokers, and other entities, including e-commerce platform operators, should not facilitate importation involving persons who are suspended or debarred by CBP.
Peter Navarro
Senior White House trade adviser Peter Navarro said this on CNN on the same day:
The DHS will
immediately begin working to combat trafficking in counterfeit and pirated goods
by: aggressively applying civil fines and penalties to bad actors, suspending
and debarring repeat offenders and treating foreign sellers of goods as
responsible parties subject to sanctions.
As this new
report documents, the private sector can do much more to combat counterfeit and
pirated products trafficking. It sets forth a set of private sector
“best practices” that include: significantly enhanced third-party
marketplace vetting; limits on high-risk products such as prescription drugs,
infant formula and airbag components; rapid notice and takedown procedures; and
pre-sale identification of third-party sellers. The administration also
wants e-commerce platforms to provide clearly identifiable country of origin
disclosures, which brick-and-mortar retail providers are required to
provide but online sellers often are not.
These best
practices are not meant as mere suggestions. The federal government will use
all means necessary to encourage rapid adoption and to monitor progress.
Taken together, these announcements suggest:
GSA’s assessment of the electronic marketplaces bidders may include the “best practices” outlined by Peter Navarro. Navarro called on Amazon and other e-commerce platforms to fight counterfeits in the wake of the recent U.S. trade agreement with China, and he again cited those “best practices” in an interview with the Washington Post, in which he sharply criticized Amazon and others for not having adequate protections against counterfeiters. GSA’s “Statement of Objectives” for the electronic marketplaces procurement already calls on the e-marketplaces to control supply chain risk; the revised solicitation was not explicit as to whether these new anti-counterfeit concerns would also be part of the technical evaluation and/or the contracting officer’s responsibility assessment for award.
The Trump administration’s focus on preventing counterfeits suggest that federal users buying directly with government purchase cards may be required, or at least strongly encouraged, to use the e-commerce platforms eventually approved under GSA’s “electronic marketplaces” initiative. Federal users, in other words, may be discouraged from making direct purchases outside the GSA-approved platforms.
Mass debarments of vendors on the e-commerce platforms — which are very possible, because the government has no other ready means (e.g., past performance or technical evaluations, responsibility determinations, etc.) to protect itself when federal users make rapid purchases from the e-commerce platforms — may begin with Customs and Border Protection (CBP) debarments:
CBP may target for debarment any third-party vendor on an e-commerce platform that “knowingly, or with gross negligence, imports, or facilitates the importation of, merchandise into the United States in material violation of Federal law.” While the Executive Order focuses on counterfeits and contraband, in principle a wider array of importing firms may be at risk if they facilitate violations of federal law.
The e-commerce platforms themselves may be targeted for debarment, on the same grounds. Since each user micro-purchase is a new purchase, debarment (a bar against purchasing) may in effect disable an e-commerce platform from selling to further federal purchasers.
An Analysis of American Governance through the U. S. Federal Government’s Green Procurement System
ZHAO Yong, University of International Relations, Beijing, email: yongjao@hotmail.com
(Text is in Mandarin, and available from the author)
[Abstract]
The formation of the green procurement system of the U. S. Federal Government is complex, the influence factors being numerous and the contents being comprehensive. This dissertation aims to provide a reference for the improvement of China’s government procurement system through exploring the cause, contents, features and evolution of the American green procurement system. Furthermore, by in-depth studying the American green procurement system as a breakthrough point so as to analyse the social problem conduction mechanism, interest distribution mechanism and the power allocation mechanism of the U. S. Federal Government, this dissertation tried to discover the characteristics and means of the American governance, promote transforming the mode of China’s Governance and enhance Chinese Governments’ ability of governance and solving the practical problems of the current Chinese society.
After the World War II, the rapid development of American economy aggravated the degree of environment deterioration. An endless stream of environmental incidents and the enhancement of environmental awareness have promoted the awakening of public environmental interests. With the help of environmental organizations and research institutions, the public environmental interests can be effectively expressed, which prompted the politicians to address environmental issues into the political agenda. Then the environmental policies were shaped after the multi-player game. From 1960’s, the importance of environmental policy in the United States has been rising, with the changing of its connotation and the value orientation. In the same period, the Federal Government’s procurement policy stepped into the policy-stage after the liberalization-stage and the standardization-stage. The the overlap of the dense introduction stage of environmental policies and the policy-period of government procurement formed the basis for establishing green procurement laws and actions.
In the process of the formation of the environmental legislation system in America, the macro path is the self-generation and the micro path is bargaining. Citizens, environmental protection organizations, interest groups, administrative agencies, the sub-committees of the Congress and other parties in the process of the legislation played different roles. The development of the governance system is embodied in the progressive development path, during which the interests’ equilibrium of the participating parties in the evolution has been reached. Through environmental legislation, the federal government expanded its powers. In the aspect of government procurement, the laws were becoming more and more plentiful. The objectives were increasingly rich. The maturity of the procurement system makes it possible to combine the the social-economic laws and the procurement laws.
Due to the vast scale of government procurement, the multiplier effect and the little political resistance, the executive branch of the Federal Government launched a series of green procurement programs based on environmental legislation and procurement legislation. By studying the green procurement programs with different legal bases, various objects and goals, diversified implementation bodies and multiple challenges, we could recognize the complexity of governance of the environmental problems.
In order to achieve the objectives of environmental governance, it is necessary to transform the policies, laws and programs into government procurement activities by the contracting officers’ and suppliers’ behavior. The contracting officer will, under the guidance of the policy, laws and the green procurement programs, weigh a variety of the procurement factors and the environmental factors, formulate the green procurement plans and implement green procurement through a variety of procurement tools. Finally, the green governance on the supplier was achieved through the government contract. During the process, the Federal administrative agencies, the Congress, the courts, and the public oversight or supervise the procurement in different forms.
From China’s perspective, the enlightenment of the U. S. Federal Governments’ green procurement system and the governance mode is: it is necessary to establish and improve the environmental problems transmission mechanism and a balanced interest distribution mechanism; to advance green procurement programs cautiously; to actively participate in the GPA negotiation; and to react the climate change negotiations carefully.
[Keywords] U. S. Federal Government, Green Procurement, Governance
