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'Buy America' clause announced in stumulus package

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KENAT-

That was the solution that Paul Krugman (won the Nobel Prize in Economics) suggested.

I think that would be the best way to go. Unfortunately, other countries might not react the way we think.

V
 
Or rather, they will react the way most economists etc. think, which is to impose tariff etc.

After all, why create your own stimulus package when you can slip stream on one from a larger economy?

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:
 
It would suck for people who you have already negotiated free trade agreements with, of course...

Since most of our collective North American manufacturing capacity has ALREADY DIED, all this will do is drive up the cost of goods such that less (proportionately) of the stimulus funds can be spent on labour. It will create artificial scarcities, rather than recreating industries which have already died. It will also stimulate "smuggling", whether that be virtual smuggling via falsifying certificates of origin, or the actual smuggling of goods.

What the US needs to do- needed to do 10 years ago more properly- was erect trade barriers against Chinese manufactured goods, to compensate for Chinese manipulation of the value of their currency. Free trade is fine, as long as it's something approximating fair trade. A country which jerks around the value of its currency is not playing fair at all. If the rest of us have prolonged trade surpluses, our currency tends to rise to even the playing field. Not so with China.

They didn't erect those barriers, and won't, even now that it's probably past the point of really being able to help. For political reasons. The $1 worth of reciprocal trade had too much political power to ever make tarrifs against the $10 of pure out and out trade surplus being bought INTO the US from China a realistic possibility.

The rest is history.

Erecting trade barriers against Canada and Mexico won't help now, whether you call them "Buy America" or what have you.
 
I say legalize prostitution and marijuana, and tax the hell out of it.

Then we'll really have free trade.

V
 
So let me get this straight molten.

If Canada retaliated by creating their own stimulus package with a 'buy Canadian' clause it would suck for Canada?

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:
 
As a mexican in Canada, I side with vc66. It might also help lessen other problems! But this will never happen in our lifetimes.

<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying ” Damn that was fun!” - Unknown>>
 
It would appear that our government is now proposing trade barriers against certain segments of our own community.
I am classified as a "white skilled worker" and to listen to certain congressmen railing against us having jobs in the bail out, is just too much.
B.E.
 
Yeah, when they were bleating on about funding for 'design of a coast guard ice breaker' I couldn't help thinking, what Engineers don't need jobs too?

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:
 
Exactly,
B.E.
 
I believe that is the one I just posted a few minutes ago.
B.E.
And yes I have seen it.
 
Didn't see the link. Great minds...

One more indicator that the new administration is trying to turn the stimulus package into a social engineering tool.
 
The reason why a world where protectionism is increased, and then each economy applies nationalistic bailouts, is a bad way out of an recession is apparently that trade grows at 4 times the rate of manufacturing, whatever that means.



Cheers

Greg Locock

SIG:please see FAQ731-376 for tips on how to make the best use of Eng-Tips.
 
I take no pleasure in my children buying foreign make cars, when they have the option to buy good American brands.
Click to expand...

Maybe it's changed, but when I lived in the USA ('95-'98), none of the "American brands" produced a car worth buying. Worse, none of the good cars produced elsewhere in the World were on sale in the USA. The reasons normally given in the trade rags were "emissions legs". Basically protectionism dressed up. "Foreign make" cars that you can buy (Honda, Toyota) are generally made in the USA, employing US citizens, so what's wrong with that?





- Steve
 
If Canada retaliated by imposing our own "buy Canadian" legislation, you can BET the US would be challenging this under the NAFTA. You can also bet that we won't bother.

Hell, we can't even charge a low stumpage fee on our own Crown land to forestry companies without the Americans crying "subsidy" and putting on countervailing tarrifs against our softwood lumber. We're apparently expected to charge as much stumpage on our VAST forest resources as private companies charge on tree plantations in Georgia etc.

It took YEARS of fighting it out in the courts while our forestry industry was being DEVASTATED by the tarrifs, before we came to a settlement- a settlement which had us accepting the PERMANENT loss of these tarrifs- tarrifs which had been declared illegal by successive NAFTA panels...

Canada and the US do a staggering amount of cross-border trade which is of tremendous benefit to BOTH countries. We are each other's largest trading partners by far- the largest nation to nation trading relationship in the world if I'm not mistaken. And as a percentage of the total value of the trade we do, the surplus of trade Canada runs with the US is TINY. There is utterly no comparison with the grand scale on which China is ripping you guys off. Yet your government would prefer, politically, to go after us DESPITE our free trade treaty. So it goes, being the mouse sleeping next to the elephant...

Yep, I'm with vc66 too, with a spin. Canada should forget about any kind of "buy Canadian policy"- we should retaliate by legalizing and taxing drugs and prostitution. The US "tourist" trade would EXPLODE! "BC Bud" is already one of our largest exports...perhaps behind something else Americans are addicted to- tarsands oil and natural gas. These two things are responsible for the BULK of our (legal) trade surplus.
 
moltenmetal,

You don't think the inflation graph above counts as "jerking around with currency values"?

Did China devalue their currency, or was that currency value, as well as that of the ¥, £, €, NZD, CAD, AUD, gold, copper, lead, fertilizer, oil and every other thing with some inkling of value .. forced up by the relative devaluation of the USD. If the US Dollar would hold its own, nobody else would have to try to hold the value of their currencies down in order to try to sell their products.

China, in holding their currency value down, and Japan by purchasing billions of dollars every day (artificially holding the value of the $ up against the ¥, only delayed the inevitable for a couple of years. They now face what Europe, UK, Canada, Australia and New Zealand, Russia, and those that kept their currencies on the free market, already have experienced for the last 2 or 3 years of declining sales, having immediately fallen victim to the dollar plunging 50% on the currency market since 2000.

I don't see how you can blame China for trying to build their economy as best they could in the face 100% USD inflation for the last 25 years. But then again, inflation is the only way that the USD can possibly hope to pay off the massive debts (now at least $38,000 PP soon to go much higher) they have built up now on all the goods, services and oil purchased from foreign sources on credit.

So who is really the one playing games here?

**********************
"Pumping accounts for 20% of the world’s energy used by electric motors and 25-50% of the total electrical energy usage in certain industrial facilities."-DOE statistic (Note: Make that 99% for pipeline companies)
 
Well back to the stumbulus package
This week the republicans asked the democrats the question "You have the votes, why don't you just pass this bill and send it to the president for his signature?"
In view of the current unpopularity of the bill among a large number of the Dem congress men's constituents it will be interesting to see how this shakes out.
B.E.
u tube video of debate,
 
I thought they'd reached agreement?

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:
 
It ain't over 'til the bill is on the presidents desk.
B.E.
 
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