I'm seriously worried about a trade war. We'll know by the end of April if Congress and President Obama have started a trade war or not.
Congress passed the Stimulus 1 bill with a Buy American clause in it
and the enlargement of the key criterion from (1) only buy foreign if it
costs 7% less to the new (2) only buy foreign if it costs 26% less. Then,
under extreme pressure the Congress modified the Buy American clause to
say that no buying actions can contravene existing international trade
agreements. That added clause, the President and Secretary of State, are
telling every other nation, makes this a safe bit of legislation.
Not really. The overriding international trade agreement is the WTO which takes six years to settle any dispute. Other countries, particularly two democracies, Japan and Canada, our largest trading partners, might not feel comfortable with the modifying clause and the risk of correcting a protectionist act six years late. If either or both countries respond with protectionist measures we are all headed for disaster. I'm keeping my eyes open on this.
Back to the stupid part. Who does Congress believe is stupid when they write this Buy American bit and claim to defang it with a modifying clause. Do they think union members, representing 3% of the American workforce that makes products are stupid enough to ignore the modifying clause? Do they think the rest of us who know that protectionism will create a global depression are stupid enough to think it is safe to put language like that in a major piece of legislation?
Who does Congress think is stupid?