No Time For a Trade War
The folks at the Grand Forks Herald also liked the New York Times headline: "If we buy American, no one else will." Their headline --the title above-- is pretty good too, from the editorial:
The stimulus package that passed the House contained a protectionist measure: a requirement that all of the iron and steel in the bill’s infrastructure projects be made in the U.S. A Senate version goes further and demands that the construction equipment be made in the USA, too...Leaders of other countries already have threatened retaliation. "On Thursday, Canadian Prime Minister Stephen Harper expressed concern and the European Union warned that it would not ‘stand idly by’ if such measures were passed," The Associated Press reported.
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Then there’s the lesson of history, which is that protectionism in the 1930s made the Great Depression worse. Here is the Encyclopedia Britannica on the Smoot-Hawley Act of 1930, which raised import duties to protect American farmers and businesses:"Within two years, some two dozen countries adopted similar ‘beggar-thy-neighbor’ duties, making worse an already beleaguered world economy and reducing global trade. U.S. imports from and exports to Europe fell by some two-thirds between 1929 and 1932, while overall global trade declined by similar levels in the four years that the legislation was in effect."
In contrast, the 1990s — the years of Bill Clinton’s presidency, years of solid growth and, ultimately, balanced budgets — were marked by a commitment to free trade. That’s not a coincidence. We’re all in this together, world leaders have stressed. Washington now must act on that vital insight by stripping protectionist measures out of the stimulus plan.
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