Buy American Stimulus Comes Under Fire from U.S. Trading Partners

It may have seemed innocuous at the time. After all, prodding U.S. citizens to "buy American" is a sort of rallying point for much of the union leadership that figures so heavily both in the U.S. auto industry and in U.S. politics. But a recent comment by President Barack Obama that "buying American" would be a part of new stimulus plan has some U.S. businesses and their trading partners protesting against such protectionism. At the heart of the issue is an $819 Billion stimulus package passed by the House that includes a "Buy American" provision. That provision specifically prohibits the purchase of foreign iron and steel for any stimulus-related U.S. infrastructure project.

Now, the U.S. Senate seems poised to alter the package to include even further "Buy American" mandates, and not everyone is happy about it. Chris Braddock, of the U.S. Chamber of Commerce, noted that "Since 95 percent of the world’s consumers live outside the United States, American workers would be the first to suffer as ‘Buy American’ provisions trigger retaliation by other countries – that is, ‘Buy German,’ ‘Buy Chinese,’ and so on." Braddock went on to say that "We certainly aren’t against companies and government ‘Buying American,’ but we are against the government arbitrarily mandating such a requirement, because it would harm our economy in numerous ways."

Warning of dire consequences, Braddock made it a point to note that U.S. protectionism was at least partly to blame for the Great Depression, further stating that, "The Chamber is absolutely committed to avoiding a replay of that disaster." Already threats of retaliation are flowing in, as Peter Power, spokesman for the EU Trade Commissioner Catherine Ashton has said, "the one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore."