The Trump administration’s actions on foreign trade has dominated the news cycle for weeks now, largely due to the tariffs announced on foreign goods. However, the scope of the administration’s “America First Trade Policy” goes beyond just foreign tariffs. It is a set of Executive Orders (EO) that utilize existing legislation, namely the Buy American Act (BAA), to change the way that the federal government procures goods and services, with an emphasis on prioritizing domestic goods over foreign goods.
This article will dive into what federal contractors need to know about this administration’s new trade policy and how it may impact their business with the federal government going forward.
There’s a handful of precedents at play in the current policy that directs the government to “champion core American interests and always put America and American citizens first” in foreign trade. The backbone of this current policy is an executive order from Trump’s first term in 2017, EO 13788: Buy American and Hire American (April 2017). This EO directed federal agencies to tighten their enforcement of the BAA, including cutting back on the use of waivers that allow agencies to get around the directives of the BAA. To understand this better, let’s familiarize ourselves with the BAA.
Enacted in 1933, the Buy American Act is often considered the foundation of U.S. federal acquisition policies and remains a key compliance regulation as of today. This act mandated that the federal government prioritize purchasing domestically produced goods for public projects.
Under the BAA, the federal government must prioritize products that are manufactured in the United States, and at least 65% of the cost a product’s components must be sourced from the United States to be considered “domestic”. The number is expected to rise to 75% by 2029.
The federal government may waive these requirements if the product is not in sufficient supply from U.S. sources, or if there is an unreasonable price increase in sourcing the products domestically. The key thing to know here is that, under the American First Trade Policy, we can expect to see a stricter enforcement of this law, and likely less authorization of waivers.
The current Trump administration is utilizing EO 13788 and the BAA to conduct a sweeping review and overhaul of American trade practices with the stated goal of protecting and prioritizing American economic interests. Key directives called out in the policy memorandum include:
With these directives set to change our foreign trade practices, and with some adjustments to foreign trade already underway, here are some key areas that federal contractors should be aware of as these will likely be affected by the America First Trade Policy.
With this trade policy centering around a favoring of domestic manufacturing, federal contractors may face stricter requirements for to source materials and labor domestically. Additionally, tariffs placed on foreign goods will likely pressure on businesses that utilize foreign supply chains. Together, this will likely disrupt the business contractors do with the federal government as they will need to modify their sourcing to fit requirements and/or account for price increases on imports.
If you currently have products you are offering to the federal government and the price of sourcing them has changed, or you are expecting them to change, now is a good time to explore price adjustment mechanisms you can utilize.
Eventually, we may see this policy lead to increased opportunities for domestic manufacturers supplying goods and services to the federal government. If you are a domestic manufacturer, you should be looking into the government contracting vehicles available to you to maximize your federal business opportunities.
We can also expect to see changes to currency exchange rates as the America First trade policy takes effect, which will impact the buying power of contractors’ dollars. As of April 30th, 2025, the USD has depreciated 8.4% year-to-date, traceable to increasing concerns for a recession and decreased investor confidence in the currency. While the USD still stands a higher value than it was in 2021, this fluctuation is something federal contractors will want to keep their eye on as it is another factor influencing their overseas trade.
This EO, along with the others signed since January, is changing the landscape of federal procurement. The workforce EOs that included a hiring freeze, a return to work order, and the reduction of the federal workforce is changing the way that agencies and contracting officers organize work. Finally, an EO that consolidates federal procurement under the General Services Administration (GSA) is expected to lead to GSA quadrupling in size.
Do you want help navigating the federal procurement landscape amidst these changes? Do you have questions about how a specific policy change may impact your contracts or acquisition opportunities? Reach out to Winvale’s team of government contracting experts today.