The big economic buzz for February was Congress passing the $787 million stimulus bill and President Obama signing it into law.
While reading the 1,000-page breakdown of the stimulus plan, one comes across a ‘Buy American’ provision.
In this provision, the Senate mandates that only U.S. products be purchased and used with the money supplied by the plan.
Having U.S. businesses only buying items such as iron and steel from other U.S. businesses, supposedly will help stimulate the economy of our American companies, but what does this mean for trade relations with foreign countries?
President Obama ‘wants to ensure that any legislation that passes is consistent with trade agreements and doesn’t signal a change in our overall stance on trade,’ White House Press Secretary Robert Gibbs said in a White House press briefing.
While the ‘Buy American’ provision may seem like a good idea, aren’t we affecting other countries’ economies by specifying where stimulus funds may be used?
The provision comes across as protectionism. Do countries such as Canada, from whom we export at least 40 percent of our steel from, feel threatened?
The provision had been somewhat softened due to concerns voiced by leaders of different countries, but despite revisions made to the measure, from Canada to China, high-ranking officials are not ‘buying’ the ‘Buy American’ provision.
Some even feel that this could be a repeat of the Great Depression. How oddly symmetrical that once again in an economic downturn, we turn to ‘protecting’ our own business interests instead of turning to the same countries who have contributed to our economic welfare before.
These billions of dollars we are allocating for the ‘Buy American’ provision – where are they coming from, and for that matter, where are the hundreds of billions of dollars funding the stimulus plan coming from? Among all these questions is the hope that the measures we are using to create a boom in our economy do not alienate us from allies and cause financial warfare.
Andrea Matthews is a communication senior and may be reached at [email protected].
