The White House published, on April 3, an executive summary of the Report to the President on the America First Trade Policy that contains the reviews, investigations, findings, identifications, and recommendations requested by President Trump. Two of its 24 chapters address government procurement issues. The most consequential is the recommendation that the United States modify or renegotiate the WTO Government Procurement Agreement (GPA) or, “if unsuccessful, withdraw” from it. The report also calls for a review of Reciprocal Defense Procurement (RDP) Agreements “to ensure they put America First.” It also includes an assessment of foreign subsidies in federal procurement. This post examines the president’s directives relating to government procurement and the summary of the actions proposed or taken in each of these areas.
The comprehensive report was prepared in response to the president’s America First Trade Policy memorandum, issued on January 20. It directed key departments and agencies, including the US Trade Representative (USTR), to review a broad range of trade agreements and actions and report to the president by April 1. Only an executive summary, not the full reports, has been made public.
Following is a brief examination of the three procurement issues addressed in the report.
WTO Government Procurement Agreement: In the January memorandum, the president directed USTR to review the impact of all trade agreements, including the GPA, on the volume of federal procurement covered by his 2017 Buy American and Hire American executive order and to make recommendations “to ensure that such agreements are being implemented in a manner that favors domestic workers and manufacturers, not foreign nations.”
The executive summary described ‘Buy American’ as “the epitome of common-sense public policy” and contended that the US has weakened domestic procurement preferences by opening its procurement market under the GPA, resulting in "lopsided" market access, citing a 2019 report by the Government Accountability Office (GAO). The summary also asserted that because some GPA partners open their procurement markets to countries that are not parties to the plurilateral agreement, US suppliers must “compete for the preferential market access they are entitled to under the agreement.” To address a lack of reciprocity and unfair competition. the summary states the US “should modify or renegotiate the GPA, and if unsuccessful, withdraw.” (In 2020, President Trump came close to withdrawing the US from the GPA). A later post will examine the potential modifications that the US might seek in a renegotiated GPA as well as the consequences of a US withdrawal from it.
Reciprocal Defense Procurement Agreements: The summary also referred to the ‘challenge’ posed by RDP agreements, which the Department of Defense (DoD) has negotiated with 28 countries, all of which (except Egypt and Türkiye) are GPA parties. They cover more defense procurement than the GPA. Under RDP agreements, DoD and the partner countries agree to waive ‘buy national’ requirements but do not, as stated in the summary, “require U.S. firms to move industrial capacity offshore as a condition of access to the markets of partner countries.” The executive summary called for a review of these agreements “to ensure they put America First.” (In a recent report, GAO criticized DoD and other agencies for failures in monitoring of these agreements to determine whether they help or hurt US industry and achieve their purposes.)
Foreign Subsidies: The president’s January memorandum directed the Office of Management and Budgets (OMB) to assess any distorting impact of foreign government financial contributions or subsidies on US federal procurement and propose guidance, regulations, or legislation to combat such distortion. According to the executive summary, OMB has assessed the value of the European Union’s Foreign Subsidies Regulation (FSR), implemented in 2023, and “other policies to tilt the playing field in favor [of] U.S. producers by strengthening domestic procurement preferences and closing loopholes.” (In 2024, the European Commission initiated three in-depth investigations under the FSR where it had ‘sufficient indications’ that bids by Chinese firms in EU public procurements benefited from foreign subsidies. In each case, the Chinese firm withdrew from the procurement before the Commission completed its investigation.)
No time table has been provided for implementation of the recommendations in the report.
Jean Heilman Grier
April 7, 2025
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