President Biden’s recent executive order to ensure that the federal government buys goods produced here at home should, in theory, deliver a necessary boost to American manufacturers and small businesses, many of which are now struggling to stay afloat amid an unprecedented economic crisis. But the Buy American directive won’t live up to its promise if the government relies on Amazon as its own personal Everything Store because the tech giant’s online marketplace is increasingly relying on products from foreign companies.
Given Amazon’s growing interest in scaling up its foreign partnerships—often at the expense of those back home—the Biden administration must be fully committed to supporting companies actually committed to supporting American manufacturing, and to spending taxpayer dollars on domestic goods to realize the promise of “Made in America.”
There’s no doubt that the latest executive order is a step in the right direction towards reinvigorating U.S. manufacturing. It directs regulators to tighten the definition of American-made products, while also creating a position in the Office of Management and Budget to oversee purchases of domestic goods. These moves will help get more Americans back to work and should be applauded.
However, the executive order does nothing to address the federal government’s increasing dependence on Amazon as a primary procurement source as the company scales up its efforts to dominate public sector purchasing. Amazon Business—the company’s B2B marketplace that allows governments along with businesses to purchase goods like office supplies and IT products—has quietly become one of Amazon’s most lucrative revenue streams, growing at nearly triple the pace of the company’s overall growth.
Amazon is already working with the federal government on procurement. The U.S. General Services Administration awarded a lucrative contract to Amazon in June to facilitate micropurchases (think office supplies and other low-dollar items) made online by federal agencies—a $6 billion market that could land Amazon tens of millions of dollars in fees. As Amazon looks to grow its foothold in the nearly $600 billion market for federal procurement, business leaders have warned that allowing any one company to dominate public purchasing could bring higher prices and create barriers to entry for other competitors—making it more important than ever to ensure those taxpayer dollars are going to the right places.
