From the Telegraph:
The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects.
The Senate’s version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods.
The inclusion of protectionist measures has quickly raised hackles in Europe.
Catherine Ashton, the EU trade commissioner, said: “We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore.”
Back in the USA, Bill Lane, who is the government affairs director for Caterpillar, is very concerned about the implications of protectionist legislation:
“We are the first to recognise that if the US embraces Buy American then the whole notion of buying national will mestastasize and limit our ability to take part in overseas projects. We are students of history. A major reason a very deep recession turned into the Great Depression was the fact that countries turned inward.”
“We would be a primary beneficiary of any type of infrastructure project in the US, but at the same time we are one of the country’s largest exporters”
Caterpillar is of course not the only company for which exports are extremely important. At firms ranging from Boeing (airliners) and GE (locomotives, power turbines, medical equipment) to small manufacturing enterprises, there are millions of jobs which are dependent on the willingness of other countries to buy American products. Too often, politicians portray international trade as something we do almost as a favor to other countries, ignoring the very real benefits that Americans derive from trade.
I believe that manufacturing is very important to this country, and would support rational policy initiatives to help make American manufacturing more competitive. Starting a trade war, though, is not the answer to the problems either of American manufacturing or of the American economy as a whole.