Protectionism always is presented as a means to save jobs, even though the cost is usually extraordinary. Trade barriers are highly inefficient and, depending on the type, often deliver much of the protectionist price surcharge to foreign producers. Consumers always lose far more than workers in affected companies gain.
But protectionism doesn’t even save many jobs. It seems that foreign countries–surprise, surprise!–aren’t willing to stand idly by as their products are blocked from the U.S. market.
An outcry from the US’s trading partners saw the bill amended at the last minute as the White House urged that it not contravene existing trade agreements. Some businesses and officials say that amendment is proving virtually meaningless in practice.
More than a third of the stimulus money is being disbursed by states and local authorities, which are not party to free trade accords such as the North American Free Trade Agreement.
Canadian manufacturers complain that their goods are being shut out of contracts funded by the US stimulus even though Canada is party to NAFTA, which prohibits discrimination.
In retaliation, some Canadian municipalities have passed “Do Not Buy American” resolutions to shut out US-made goods. That has rattled some exporters. Texas manufacturer JCM Industries told the Financial Times that it might have to lay off workers if the situation worsened.
Pennsylvania-based steel company Duferco Farrell has warned it might lay off 600 workers after its biggest client said it would cancel orders because Duferco’s goods, some of which have to be partly produced abroad, were not Buy American compliant.
What was that about good jobs for American workers? So much for the helping hand of government!
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