Archive for the ‘trade war’ Category

Stimulus: “Buy American” Retained; Sure To Anger International Partners

February 14, 2009

Congress approved protectionist measures in a $789 billion stimulus bill Friday that U.S. trading partners have warned could spark a trade war.

Associated Press

The bill, however, left the Obama administration some room to maneuver to appease other countries who say it will benefit U.S. companies unfairly.

The stimulus bill was approved by the House Friday afternoon and by the Senate later in the evening. It now goes to President Barack Obama who is expected to sign into law quickly.

Major partners, including the European Union and Canada, say the legislation favoring U.S. steel, iron and manufactured goods for government projects could undermine pledges by the leaders of major economies not to resort to perfectionism during the world economic downturn.

Requirements known as “Buy American” were softened as the bill progressed through Congress and after strong criticism from abroad. Senate and House negotiators agreed to a version that would require the government not to violate trade agreements when implementing the law.

The bill also allows the Obama administration and state governments to waive requirements to favor U.S. companies if they deem it in the U.S. public interest and if they publish a justification.

The dispute has put Obama in a difficult position. While campaigning last year, he raised questions whether U.S. trade agreements contained sufficient protection for labor and environmental standards. He has warned recently, however, about antagonizing trading partners and has made clear that passage of the overall stimulus bill is needed urgently to mend the U.S. economy.

In several television interviews last week, he said the stimulus package should not include protectionist language that could trigger a trade war. But now that it does, he is likely to sign it anyway. The measures appear, however, to give the administration discretion about how to implement spending decisions, given the requirement of meeting trade obligations.

Read the rest:
http://www.foxnews.com/politics/elections/2009/
02/13/congress-approves-protectionist-measure-
spark-trade-war/

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President Obama visited the Caterpillar factory in East Peoria, Illinois this last week.

Caterpillar says it pays $100,000 in tariffs on each piece of heavy equipment it exports to Columbia, because the U.S. Congresss has failed to pass the free trade agreement….

Now with this “buy American” provision in the stimulus it is likely the U.S. will find trouble with other trading partners…

Related:
 Pastor Obama Continues With Holy Stimulus, But The Congregation Isn’t Buying

Why Europe No Longer In Obama Camp Over Stimulus
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China’s leader Hu Jintao cautioned President Obama about the “buy American” provision in the economic stimulus plan during a phone conversation.

Related:
CNN:
http://edition.cnn.com/2009/POLITIC
S/02/05/senate.buy.american/index.html

 “Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

 Dallas Federal Reserve Chief, China, Germany All Call Protectionism “Death”

China announced that President Hu Jintao, seen here in 2008, ...
President Hu Jintao of China (AFP/File/Louisa Gouliamaki)

Made in china.jpg

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What Became Of Obama’s ‘Hope?” Suddenly ‘Catastrophe’ Looms

February 6, 2009

Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared “we have chosen hope over fear.” Until, that is, you need fear to pass a bill.

And so much for the promise to banish the money changers and influence peddlers from the temple. An ostentatious executive order banning lobbyists was immediately followed by the nomination of at least a dozen current or former lobbyists to high position. Followed by a Treasury secretary who allegedly couldn’t understand the payroll tax provisions in his 1040. Followed by Tom Daschle, who had to fall on his sword according to the new Washington rule that no Cabinet can have more than one tax delinquent.
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By Charles Krauhammer

The Daschle affair was more serious because his offense involved more than taxes. As Michael Kinsley once observed, in Washington the real scandal isn’t what’s illegal, but what’s legal. Not paying taxes is one thing. But what made this case intolerable was the perfectly legal dealings that amassed Daschle $5.2 million in just two years.

He’d been getting $1 million per year from a law firm. But he’s not a lawyer, nor a registered lobbyist. You don’t get paid this kind of money to instruct partners on the Senate markup process. You get it for picking up the phone and peddling influence.

At least Tim Geithner, the tax-challenged Treasury secretary, had been working for years as a humble international civil servant earning non-stratospheric wages. Daschle, who had made another cool million a year (plus chauffeur and Caddy) for unspecified services to a pal’s private equity firm, represented everything Obama said he’d come to Washington to upend.

And yet more damaging to Obama’s image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama’s name, was not just bad, not just flawed, but a legislative abomination.

It’s not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It’s not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/
article/2009/02/05/AR2009020502766.html?hp
id=opinionsbox1

Obama cuts ‘Buy American’ plan after EU trade war threat

February 4, 2009

The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war.

The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services.

Gordon Brown was caught in the crossfire as John Bruton, the EU Ambassador to Washington, said that “history has shown us” where the closing of markets leads — a clear reference to the Depression of the 1930s, triggered by US protectionist laws.

From The Times (UK)

Read the rest:
http://www.timesonline.co.uk/tol/ne
ws/world/europe/article5655115.ece