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Obama stimulus plan fomenting trade war

The Obama regime’s short-sighted but typical “buy American” stimulus policies are beginning to foment a trade war between the United States and other countries.

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.
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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.
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Take, for instance, 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.

The new buy American provisions, the company said, are being so broadly interpreted that Duferco Farrell is on the verge of shutting down. Part of an increasingly global supply chain that seeks efficiencies by spreading production among multiple nations, it manufactures coils at its Pennsylvania plant using imported steel slabs that are generally not sold commercially in the United States. The partially foreign production process means the company’s coils do not fit the current definition of made in the USA—a designation that the stimulus law requires for thousands of public works projects across the nation.

In recent weeks, its largest client—a steel pipemaker located one mile down the road—notified Duferco Farrell that it would be canceling orders. Instead, the client is buying from companies with 100 percent U.S. production to meet the new stimulus regulations. Duferco has had to furlough 80 percent of its workforce.

“You need to tell me how inhibiting business between two companies located one mile apart is going to save American jobs,” said Bob Miller, Duferco Farrell’s executive vice president. “I’ve got 600 United Steel Workers out there who are going to lose their jobs because of this. And you tell me this is good for America?”

The Democrats’ goals of winning more votes and securing more power over economic affairs has led them to force policies on American individuals and businesses that limit their trading partners, pit people of different nations against each other where mutually beneficial trade would normally take place, replace self-interested and more-informed decisions with political edicts from on high, and reduce economic efficiency by punishing the increased division of labor that necessarily emerges in a free (global) economy. The number of correct policy decisions made by this bumbling idiot in the White House remains steady at one: to close the prison camp at Guantánamo Bay, and that’s just a promise at this point.

Raise your hand if your economic philosophy openly and proudly promotes mutual prosperity, complete freedom of trade, and a worldwide division of labor, with all the peace and cooperation that come along with it.

Posted in Divisiveness, Economics, Obama failures