The New York Times opined today that the so-called stimulus bill’s “Buy American” provisions are having some unintended consequences – sparking anger from allies and likely leading to significant losses in American jobs.
How so? Surely that protectionist mandate was designed to increase American jobs by ensuring that only goods – including iron and steel — manufactured in the U.S. can be used in public projects financed by stimulus monies. And, of course, it wouldn’t conflict with U.S. trade agreements. Why, POTUS himself had a provision inserted to that effect.
But, as the NYT points out, states, counties, and cities aren’t parties to those agreements, so they can thumb their noses at trade partners and shut out any goods not made in the U.S. And the consequences?
Foreign and domestic companies that employ hundreds of workers in this country cannot bid for government projects because they cannot guarantee the American provenance of all the steel, iron and manufactured goods in their supply chain, as the provision requires. Others are scrambling to figure out whether American-made alternatives exist to replace their foreign inputs.
The steel company Duferco Farrell, for example, has cut about 600 jobs in Pennsylvania after it lost orders from its biggest customer because some of its goods are partly produced abroad. The Westlake Chemical Corporation of Houston has lost sales to a Canadian vinyl pipe maker that is cutting back production because it can’t bid for some American jobs.
The editorial concludes:
Indeed, whether it is from the point of view of diplomacy or of job creation, “Buy American” is a terrible idea. One that could make the global recession worse.
Wish the NYT had taken this tough stance early on, instead of the wimpy whine in an earlier editorial CEI commented on.