Buy America? Bye, American Jobs

Here’s the ultimate irony, one with dramatic consequences to US families: a federal policy to stimulate our flagging economy that actually puts more of our jobs at risk. “Buy American” provisions found within this year’s $788 billion stimulus spending package expose US workers in several manufacturing sectors to job loss. It’s that the stipulations of our national and local governments buying only “all-US-sourced goods” places an undue burden on most manufacturers who’ve sourced raw materials and components from foreign suppliers for decades. So – no competitive bids on public works contracts means loss of revenue… and layoffs.

That, coupled with the current administration lurching toward protectionist duck-n-cover, put the US as a whole at risk of losing ground in its export growth. Whose interests in the US are being served, in the long run? Considering that some 80% of Americans work for small to medium-sized manufacturers — all of whom partake of the international business pie — it’s dicey to start tariff wars. This month has produced a costly tit-for-tat between the US and China, having to do with Tires and Chickens. If other industries besides poultry and tires run for cover, then Sino-US upsmanship could tip the balance of world trade badly against our manufacturers. (I’ve written in an earlier blog post about the administration’s perceived double-talk regarding NAFTA-initiated reciprocal trucking rights for Mexico … to date, no satisfaction on either side of the fence)

I’ll be watching how our administration plays both sides of the crowd at this weekend’s gathering of the G20 (the group of big, rich, and emerging economies) in Pittsburgh.

A voice in the wilderness has been the U.S. Chamber, whose president and CEO Tom Donohue cheers from the bleachers for the US worker, while boosting the association’s goal of doubling US exports by 2014. Speaking recently in East Lansing, Michigan, Donohue reminded guests that “it was our free enterprise system and our values of individual initiative, hard work, and innovation that built our great country—and trade has been central to our success.” Read an excellent synopsis of the talk here. What would I do if I were running the joint? Let the free market reign … remove obstacles to our successful competition and ratify pending free trade agreements with Korea, Colombia, and others.

Stalemate, or Escalation? American companies have too much at risk right now to get drawn in to this game. Unfettered, they can sustain competitive edge and continue to expand exports… which would make the US Chamber cheer even harder.