Today, President Barack Obama, Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper are attending a summit held in Mexico to address obstacles facing North America. One of the major issues these leaders will be addressing is the increasing tendency for the three players to erect trade barriers in response to the U.S.’ passage of several protectionist, “Buy American” policies.
In March, the U.S. violated the North American Free Trade Agreement by passing a provision in the omnibus spending bill ending a program that allowed Mexican trucks to ship goods deep within U.S. borders. Mexico retaliated by raising tariffs on 90 U.S. products, valued at more than $2.4 billion in U.S. exports to Mexico.
Canada, the U.S.’ leading trade partner, was outraged when Congress passed a provision in the “stimulus” that allowed hundreds of municipalities and several state legislatures to instruct state-wide companies to use only American steel. Canadian municipalities countered with protectionist measures of their own, urging citizens to avoid purchasing American-made products. While the current trade situation has certainly put a strain on foreign relations within North America, U.S. consumers ultimately bear the costly burden of protectionism.