Is this what the first trade war of the global economic crisis looks like?
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. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.
Outrage spread in Canada, with the Toronto Star last week bemoaning “a plague of protectionist measures in the U.S.” and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. 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.
That was a very bad move on Congress’ part. I said at the time that this was going to come back to bite them in the south end. Shades of Smoot Hawley…
Christ is risen!
John
AO is precisely correct. And what will happen when nationalized industries are subject to political pressure to “buy American” but trade wars that will impoverish all on all sides of the transaction?
The law of unintended consequences … or how not to let labor run the economy. Either way, ’tis the same outcome…
Now if only we could convince the US Auto industry to cut costs somehow so we can compete on the world market. Don’t hold your breath.