Buy American

Fanny Cradock

If the US does go ahead with the 'Buy American' clause that is currently attached to the $800bn stimulus bill what do people think the global effects will be?

Surely if this clause is ratified then it is nothing more than the US circling the protectionism wagons? This, I fear, could lead to counter protectionism clauses from the Eu , Russia , China etc. And a global trade war is needed like a hole in the head, no?

http://news.bbc.co.uk/2/hi/business/7866900.stm

jank

Bad move for them to put this in. There is talk that Obama wants to water it down. It is a tricky one. A popular move but very bad for business in the long run. Dems want to appease the labour unions but want to keep trade flowing, Reps want to take the popular line but also want to keep trade flowing and as the party of fiscal responsibility (well pre bush anyway) and big business they dont want to see this either.

It sounded good on paper but Obama messed up with this. Not a good few days for him. However, in the long run we will see what the ramifications are of the stimulus package.

Fanny Cradock

Well, let's hope it isn't the overall waste of money that the last one appears to have been.

Anyway, these guys in Congress obviously know something I don't because they appear oblivious to the possibility that protectionism by any name could effectively exacerbate the global problem. Let's hope the Obama sees some sense!

Sand

Its not exactly surprising as Obama was fairly hostile towards free trade in his campaign and pandered to union hostility on that issue - which is fairly irresponsible.

It is however exceptionally disappointing to see such a short sighted measure taken. The depression in the late 20 and the early 30s became "Great" precisely because the governments of the world engaged in a series of protectionist measures that curbed trade and prosperity even further and more decisively. Lets see what the US state department has to say about it: Oh yes, the last time a economic crisis was "solved" with protectionism world trade declined 66%....sounds like exactly what the world needs.

This measure completely undermines the US ability to lead on the issue of keeping global trade going. No one else really has the authority to lead on it. And no one is going to get out of this economic crisis by restricting economic activity and trade. But as the US restricts foreign trade, foreign nations are going to restrict US trade in turn and so on and so on in a race to the bottom.

Obama seriously needs to get this measure removed or very watered down [ I.E. use US products where US products are the best deal on offer....which is fine]. Otherwise the title of "worst president in US history" could have a new challenger.

jank

Always with the drama Sand!:pac:

Running Bing

jank wrote: »

Always with the drama Sand!:pac:

Yeah..save it for the next Republican administration;)

Sand

No drama - hence the EU, Canadian and other "concern" - read "What the **** are they playing at?!?!" - responses to the clause. A shift by the US to protectionism, leading to retaliatory trade wars with the EU, China, Japan and Canada amongst others would quickly reveal just what a meaningless non-issue Gitmo and its closure is.

Happily it appears the clause is being watered down to meaningless feel good text with the US asserting it will still keep to existing international agreements, which effectively means business as usual. From the comments posted to news stories, it appears a lot of Americans were engaging in a wonderfully short sighted "Bring it on!!!!" attitude to a trade war, but common sense seems to have triumphed.

Assuming the bill is passed of course.

Overheal

Its just another bad move imo.

Ive been thinking more and more about the automotive bailout - if we had allowed them to fail, someone would have bought out their plants and workers (at some point) - probably a european or asian automaker with a stable business and r&d model - and we would have had that much more globalisation of one of the major industries. Afte all I thought that was what we were going for here. We have how many US carmakers? Too many capital purchase products trying to compete with eachother. This Buy American thing wouldnt make things any better in that regard either - it would only stave off the chances that american industries will undergo consolidation.