Hello I’m Charlotte Bellis and you’re watching Newsy.com…

Buy American…or, don’t.

World leaders are criticizing a “Buy American” clause in the nearly $900 billion economic stimulus package – particularly the emphasis on using American-made iron and steel to fuel public works projects.

Critics around the world say the move will build barriers for international trade.

“So you get Putin saying, buy Russian and you get the Chinese saying buy Chinese, and the French saying buy French, this is not what we need.”
- Ben Verwaayen, CEO, Alcatel Lucent (CNBC)

We’re examining coverage on this global conversation from CNBC, Canada’s CBC News, the Wall Street Journal, FOX News and others.

Canada’s CBC News alludes to how countries tend to be contradictory on their perspective of trade barriers.

“Governments hate protectionism, at least everyone else’s version of it.”

This article outlines criticism toward the “Buy American” clause from several global economic powerhouses.

CBC reports Chinese Premier Wen Jiabao saying…

“Trade Protectionism serves no purpose as it will only worsen and prolong the crisis…”


Yet CBC News also points out what it calls China’s own version of protectionism, saying…

“Well, wait a minute: The U.S. Treasury Secretary Timothy Geithner says China manipulates its currency to keep it artificially low, making its exports cheaper. Plus, the U.S. accuses both China and Russia of dumping their steel [into the U.S. market].” (CBC News)

The Wall Street Journal points out that the Buy American provision drives a wedge between the US and its closest allies.

“The Canadians are incensed. The Canadians are saying “what are you doing, you’re our number one trading partner, you and your businesses depend upon us, and your going to punish our steel industry?” (The Wall Street Journal)

FOX News brings us back to the “Buy American” clause in the proposed stimulus package. They talk to an economic expert who says it will only drive prices in the U.S. up.

“… this has already been tried under the Bush administration. You help the American steel industry and keep out foreign steel and what that does it means that you’ll get more employment in the steel industry and more profits in the steel industry but all the American companies that use steel to make automobiles, bridges and a thousand other things will find their costs going up and they will lose profits and lose employment.” (FOX News)

U.S. analysis website the Council on Foreign Relations took a broader, more international view on the threat of American protectionism saying…

“The consequences of giving other countries the right to discriminate against American goods, or charge higher tariffs on American imports, would amount to shooting ourselves in the foot.” (CFR)

Time reports how the debate is reminiscent of the Great Depression, when protectionism cut world trade by trade by two-thirds.

“History looks back at the infamous Smoot-Hawley Act, which jacked up tariffs in the U.S., as a disastrous step that stymied the international economic cooperation needed to alleviate the worst economic catastrophe in modern history…All we can hope is that government leaders have learned the lessons....” (TIME)

Do you think Obama’s “Buy American” clause is the first step towards deepening the global recession? Are world leaders being hypocritical or over reacting to “protectionism”?

We invite you to share your views with us, and please check out our sources.

I’m Charlotte Bellis for Newsy.com…

Buy American... or, don't

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Feb 4, 2009

Buy American... or, don't

Hello I’m Charlotte Bellis and you’re watching Newsy.com…

Buy American…or, don’t.

World leaders are criticizing a “Buy American” clause in the nearly $900 billion economic stimulus package – particularly the emphasis on using American-made iron and steel to fuel public works projects.

Critics around the world say the move will build barriers for international trade.

“So you get Putin saying, buy Russian and you get the Chinese saying buy Chinese, and the French saying buy French, this is not what we need.”
- Ben Verwaayen, CEO, Alcatel Lucent (CNBC)

We’re examining coverage on this global conversation from CNBC, Canada’s CBC News, the Wall Street Journal, FOX News and others.

Canada’s CBC News alludes to how countries tend to be contradictory on their perspective of trade barriers.

“Governments hate protectionism, at least everyone else’s version of it.”

This article outlines criticism toward the “Buy American” clause from several global economic powerhouses.

CBC reports Chinese Premier Wen Jiabao saying…

“Trade Protectionism serves no purpose as it will only worsen and prolong the crisis…”


Yet CBC News also points out what it calls China’s own version of protectionism, saying…

“Well, wait a minute: The U.S. Treasury Secretary Timothy Geithner says China manipulates its currency to keep it artificially low, making its exports cheaper. Plus, the U.S. accuses both China and Russia of dumping their steel [into the U.S. market].” (CBC News)

The Wall Street Journal points out that the Buy American provision drives a wedge between the US and its closest allies.

“The Canadians are incensed. The Canadians are saying “what are you doing, you’re our number one trading partner, you and your businesses depend upon us, and your going to punish our steel industry?” (The Wall Street Journal)

FOX News brings us back to the “Buy American” clause in the proposed stimulus package. They talk to an economic expert who says it will only drive prices in the U.S. up.

“… this has already been tried under the Bush administration. You help the American steel industry and keep out foreign steel and what that does it means that you’ll get more employment in the steel industry and more profits in the steel industry but all the American companies that use steel to make automobiles, bridges and a thousand other things will find their costs going up and they will lose profits and lose employment.” (FOX News)

U.S. analysis website the Council on Foreign Relations took a broader, more international view on the threat of American protectionism saying…

“The consequences of giving other countries the right to discriminate against American goods, or charge higher tariffs on American imports, would amount to shooting ourselves in the foot.” (CFR)

Time reports how the debate is reminiscent of the Great Depression, when protectionism cut world trade by trade by two-thirds.

“History looks back at the infamous Smoot-Hawley Act, which jacked up tariffs in the U.S., as a disastrous step that stymied the international economic cooperation needed to alleviate the worst economic catastrophe in modern history…All we can hope is that government leaders have learned the lessons....” (TIME)

Do you think Obama’s “Buy American” clause is the first step towards deepening the global recession? Are world leaders being hypocritical or over reacting to “protectionism”?

We invite you to share your views with us, and please check out our sources.

I’m Charlotte Bellis for Newsy.com…

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