Is a Trade War on the Horizon?
Kevin Binversie /
Jay Van Andel Senior Trade Policy Analyst at Heritage Daniella Markheim comments on why the recently discovered “Buy American” provisions in the ‘stimulus’ bill will only hurt the American economy in the long run.
Advocates of Buy American rules claim that limiting competition for U.S. government contracts to domestic firms will protect U.S. jobs and help prop up firms in troubled industries. Regrettably, the cost of such protectionism will be inflicted on the American public, who will fail to get the best value for their hard-earned taxpayer dollars; the U.S. workers who lose their jobs when the companies they work for go out of business as countries retaliate in kind; and the economy as a whole, which will become less productive.
Meanwhile, at the same time America’s trading partners are beginning to react to the news with a retaliatory tone.
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.”