A troubling feature of the proposed spending package is the protectionist “Buy American” provision forcing manufacturers to give preferential treatment to domestic producers of iron, steel and other manufactured goods in building contracts and other spending unless the cost of domestic steel adds more than 25 percent to the cost of the project.
“These rules are certainly nice for American contractors who now no longer need to remain competitive with their foreign counterparts,” stated Grover Norquist, president of Americans for Tax Reform, “but how about the taxpayers who will be paying more money for the same goods that could be purchased more cheaply from foreign manufacturers?”
“At a time of global economic uncertainty, now is not the time to violate our commitments to the World Trade Organization and offend our key trading allies,” continued Norquist, “The almost certain retaliation by foreign countries implementing their own protectionist legislation would halt US exports and hurt the very same workers and businesses this spending package is attempting to benefit. The US has been down this protectionist road before. The Smoot-Hawley Tariff Act of 1930 was also introduced as a means to protect American workers and businesses and reduce imports during a global recession. What followed? The Great Depression.”