Free Markets, Free People

Trade War?

It would appear the first shots in what could develop into a global trade war have been fired:

Ordered by Congress to “buy American” when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.

Outrage spread in Canada, with the Toronto Star last week bemoaning “a plague of protectionist measures in the U.S.” and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.

Reports are Canadian McDonalds are only using Canadian potatoes and calling them “freedom fries” – okay, I’m kidding. But this isn’t a kidding matter. You remember how, when caught with the “buy American” clause in the stimulus package, Obama tried to wave it away by saying it didn’t mean what it said and Congress promising to water it down?

Yeah, like many political promises made by Congress and the President, this one has now proven to be false.

The buy American provisions in the stimulus package, signed into law in February, were just the beginning. Last week, Obama unveiled a series of proposals aimed at increasing taxes by nearly $200 billion over the next decade on U.S. companies doing business abroad. At a White House event, Obama said the measures were designed to “close corporate loopholes” that permit companies to “pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y.”

Those sorts of measures are sure to speed the recovery. [/sarc]



20 Responses to Trade War?

  • In unrelated news, Reed Smoot and Willis Hawley were recently seen smoking cigars and having a good laugh…

  • I  believe that Erb was correct when he said that this was a President that thinks like him…. shallow, duplicitous, ignorant, etc. He could have added that most of Congress thinks like him, too.

  • Are these the same Canadians that have Canadian content laws regarding media products?


  • I’m not laughing.  This is eerily reminiscent of the Great Depression.  It’s almost as if our our elected leaders really believe that doing the same things over will lead to a different result. 

    • Probably because these actions make political but not economic sense, and politicians are in charge of making these decisions.

      Its simply a race to see if enough taxes and pain will hit before 2012 or not.

      I wonder if the MSM will man up a bit, or will they commit to Obama and possibly end up in deep trouble.

      • and I want to say that if Obama had simply run a stimulus bill that was more seriously targeted and not extending out forever, perhaps with more tax cuts, considered the impact of his rhetroic and actions, and had decided that maybe some of his more expensive programs could wait until we were out of the woods, I’d be a lot more supportive of his chances.

        Example: Think about this: He could have let Chrysler go down to make the UAW cooperate more on GM, possibly saving the car company and the union, while looking economically literate. Instead he saves the UAW and essentially tells them they will be provided for with GM, as well. Maybe I am wrong, but I think the UAW is not very well liked by most people – I think its a “teachable” moment for the moderates and independents of a certain age that rather than prescribe radiation treatment to save a patient, Dr. Obama just hands out opium laced lollipops.

        The young ‘uns will be slower but will eventually relearn all of those lessons about planned economies and picking winners, etc. The car companies are a great way to learn this, in some ways, because everyone buys a car and will figure out that the Government Motors product is inferior while recalling all of those headlines saying “Obama agrees to additional restructuting funds for GM” (plus the tax return form they are staring at.)

        • Oh, and the healthcare market for all kinds of reasons is the opposite of the car market in providing a teachable moment against socialistic policies – which is why the left pushes it. 

          “I have to wait 1 month for that piece of trash car that breaks down!”


          “Well, the very important doctor and the very fancy machine are busy, so it makes sense I have to wait 3 months before they can handle my case.”

  • I fail to see how this is a problem.  They said this was good, so why should we worry?

    I mean, what can possibly go wrong with one of TAO’s plans?

  • The funny part is that if you talked to many of those Canadians, they would say they love Obama as much as ever. 

    • Yeah, it’s not Obama, it’s George Bush’s fault, it’s”America” that’s at fault.
      Poor poor photogenic Obama of the wonderful pectorals and the eloquent speech, and his charming wife, First Lady for the 21st Century, he inherited all this you know, and if there’s a trade war, well, it’s the fault of the previous administration, not the Obama administration.

      But take heart, clearly a good portion of the the rest of the Western world is as collectively stupid as we are, so we can at least rest comfortable in the knowing that we’re not going down the ladder while they are climbing up.

      Alas, the eastern world has the number of this administration.

  • The world wanted Obama and now they have him.

    O-bam-a!  O-bam-a!  O-bam-a! 

    Dripping bloody irony.

  • Once again, democrats (spit) demonstrate that they haven’t got the first friggin’ clue about economics (or foreign policy, for that matter).

    “Buy American” is a great idea in theory, but it’s sort of stupid when it causes people to spend more money than they need, ESPECIALLY in the middle of a recession when people are already strapped for cash.

    I suppose, in fairness, that I oughtn’t pick on just the democrats (spit) for this, because there are Americans of all political persuasions who fall for this protectionist bunk.  On the face of it, it makes sense: why send money to Canada or Red China when we can put our fellow Americans to work making the same product?  If our own companies can sell the same product for the same price, then it makes perfectly good sense.  However, if the American version costs significantly more, then the buyer is merely wasting some of his money, which means that he hasn’t got it to spend on something else (like, perhaps, better wages or more benefits for his employees).

    This issue, paired with the demise of GM and Chrysler, SHOULD serve as a catalyst for some national soul searching about why American industry can’t dominate or even compete on the world market as it used to.  Unfortunately, nobody seems willing or even able to connect the dots.

    As for foreign policy, doesn’t “buy American” simply reek of the kind of unilateralist cowboy attitude that the left railed against when Bush was in office?

  • Hmmm, time to stock up on beans and rice.  OK, stock up even more then I have now.  Should be an interesting ride.

  • We own a lighting store.  We stock mostly commercial and industrial bulbs and fixtures.

    We have a military installation nearby.  Within the last two months, we had a contractor come in and wanted fixtures, but they had to be made in the USA.  We checked boxes, and all that we had were stamped with “Made in Mexico”.   These were Lithonia fixtures.  The contractor left emptyhanded and hasn’t come back.  He said the military required clear indication on the fixtures that they were “Made in the USA”.

  • Hmmm.  If you import all of  the  parts from outside the USA but assemble the item inside the USA, can you still label the item as “Made in the USA”?

  • wow, textbook case of people too narcissistic and shallow to learn from the mistakes of history.

  • Obama’s first foreign visit was to Canada. The media and the public were tickled pink.

    Our PM, Stephan Harper, seeked assurances from Obama that the US would continue to respect trade agreements between our two countries.  Obama promised to respect these agreements. 

    So, is this how Chicago politics works?

    “Obama lied, trade died?”

  • “Nice country you got here.  It’d be a shame if something happened to it.  Say, you don’t mind if me ‘n the boys boycott your exports, do ya?”

  • I am from Canada and I support ‘freedom fries’!