A “Buy American” drive in President Barack Obama’s economic stimulus plan is sparking protests from businesses and trading partners, and drawing cheers from domestic manufacturers and unions.
Obama is pushing Congress for swift passage of the American Recovery and Reinvestment Act as vital to prevent the collapse of the fragile US economy amid the accelerating global financial crisis.
The House of Representatives passed an 819 billion dollar version of the economic stimulus package Wednesday that contains a “Buy American” provision generally barring the purchase of foreign iron and steel for any stimulus-funded infrastructure project.
The massive stimulus plan of tax cuts and spending has moved to the Senate, where lawmakers are working on their own version that extends the “Buy American” initiative on iron and steel to include all US manufactured goods.
As the global economic crisis continues to deepen, the unmistakable stench of economic nationalism is on the rise around the world. Confronted with collapsing industries and growing anger over job losses, governments are reaching for protectionist measures despite the disastrous consequences of such beggar-thy-neighbour policies in the 1930s.
The new Obama administration spurred on the rising tide of protectionism with the comments last week of Treasury Secretary nominee Tim Geithner accusing China of manipulating its currency to boost exports. Designating Beijing as a “currency manipulator” would allow the White House to invoke a broad range of punitive tariffs and other economic penalties against China under US trade legislation.
The Democrats in the House of Representatives went one step further by including a “Buy American” provision in Obama’s $825 billion stimulus package approved on Wednesday. The clause, which requires infrastructure projects funded by the package to use only US-made iron and steel, has provoked protests from European steelmakers. Democrat senator Byron Dorgan is proposing a broader measure to exclude most foreign-made manufactured goods when the package reaches the Senate.
Such measures threaten to provoke escalating retaliation and a full-blown trade war. A comment in the US journal Foreign Policy warned that the “explicitly protectionist language” contained in the package would “certainly be taken as a bad sign by the rest of the world. The world can deal with a protectionist India or Indonesia. The trading system will have much more trouble if the United States starts to renege on its traditional leadership role.”
Is this move the slippery slope of economic nationalism? Or possibly good politics?
our economy is bad i feel as if i am on Tax Payer Life Support
Hi rawdawg thanx for the read…..from where I sit not many taxpayers are getting anything out of the last couple of governmental transfusions.
The problem is for nearly the last 20 years, the government has not really stood up for the US worker. You have the republicans working to weaken the what little power labor has with businesses. You have both sides turning a blind eye to illegal immigration. You have the H1-B visas and no attempts to stop technolgy jobs from going to India or China.
As it stands, there is some room for some nationalism especially when the goal is to get American workers to work.
Terrant it is morning and I need caffeine…..will agree a bit that there is a bit of wiggle room……but all trade agreements need to be more labor friendly….probably not gonna happening but a good idea…..just the same.