The Campaign Spot

Obama’s ‘Buy American’ Policy Gives Us the Worst of Both Worlds

Interesting. During the campaign, Obama pledged to renegotiate NAFTA; he then flipped on that pledge (or, you could say, it reached its expiration date) and yet somehow he’s managed to launch a trade war anyway.

Ordered by Congress to “buy American” when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.

Outrage spread in Canada, with the Toronto Star last week bemoaning “a plague of protectionist measures in the U.S.” and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.

The story details the situation of Duferco Farrell Corp., “a Swiss-Russian partnership that took over a previously bankrupt U.S. steel plant near Pittsburgh in the 1990s and employed 600 people there.” Because they use imported steel slabs to make their coils, they’re not considered “made in the U.S.A.,” and customers are canceling orders. So the “Buy American” provision, designed to protect American jobs, has led to a Pittsburgh factory furloughing 80 percent of its workforce.

President Bush had his flaws in economic policy, but he generally managed to avoid “cut off your nose to spite your face” policies like this one.

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