American businesses and trading partners are already opposing the innate ‘protectionism’ implied by “Buy American” provision of the $819 billion new economic stimulus package, passed by the US House of Representatives on Wednesday.  

A kind of expansion on a 76-year-old federal law, the “Buy American” stipulation of the American Recovery and Reinvestment Act, pushed by President Obama, would obligate the purchase of material for stimulus-funded infrastructure projects from American companies alone - thereby prohibiting the purchase of foreign iron and steel for all such projects.

The “Buy American” provision of the stimulus plan, to be considered by the Senate next week, is expected to move a step further - with the ‘American-made’ restriction applying to all products and equipments used for the projects.

Since a major part of Obama’s stimulus plan is infrastructure spending – the projects ranging from rails, roads, airports, bridges, and dams to housing as well as military construction - leading business interests are sounding the alarm bell that measures like “Buy American” would result in trade wars, similar to those that sparked the Great Depression.

In the opinion of Chris Braddock, of the US Chamber of Commerce, “Since 95 percent of the world’s consumers live outside the United States, American workers would be the first to suffer as “Buy American” provisions trigger retaliation by other countries - that is, “Buy German”, “Buy Chinese,” and so on!”