A lot of people moan about jobs going overseas in spite of the fact we’re living in a global economy. Well, we were until Obama came along, and up north in Canada they’re plenty upset.
From WaPo:
Ordered by Congress to “buy American” when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.
Makes you wonder how much more we spent ripping them out of the ground? Canada is firing back.
Outrage spread in Canada, with the Toronto Star last week bemoaning “a plague of protectionist measures in the U.S.” and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.
This type of protectionism in the end will cost American jobs, (see more below). On top of that, how much more will we pay for the U.S. made products? How many companies that cannot replace their vendors with American made products are going to start losing American supply contracts and ultimately, American jobs?
Take, for instance, Duferco Farrell Corp., a Swiss-Russian partnership that took over a previously bankrupt U.S. steel plant near Pittsburgh in the 1990s and employed 600 people there.
The new buy American provisions, the company said, are being so broadly interpreted that Duferco Farrell is on the verge of shutting down. Part of an increasingly global supply chain that seeks efficiencies by spreading production among multiple nations, it manufactures coils at its Pennsylvania plant using imported steel slabs that are generally not sold commercially in the United States. The partially foreign production process means the company’s coils do not fit the current definition of made in the USA — a designation that the stimulus law requires for thousands of public works projects across the nation.
In recent weeks, its largest client — a steel pipemaker located one mile down the road — notified Duferco Farrell that it would be canceling orders. Instead, the client is buying from companies with 100 percent U.S. production to meet the new stimulus regulations. Duferco has had to furlough 80 percent of its workforce.
“You need to tell me how inhibiting business between two companies located one mile apart is going to save American jobs,” said Bob Miller, Duferco Farrell’s executive vice president. “I’ve got 600 United Steel Workers out there who are going to lose their jobs because of this. And you tell me this is good for America?” More [here].
And just how is that creating/protecting American jobs? Also noteworthy, we’ve not heard a whimper from the United Steel Worker’s union.
In the end, we’re robbing Peter to pay Paul. American-based suppliers to government contracts that buy foreign goods and resell them here in the U.S. will be left out in the cold if they fail in finding competitive American made products. Jobs will disappear, only to maybe reappear elsewhere. That’s not job creation.
It may look good in the short-term, but history has proven that protectionism hinders job growth and in the case above, cost American jobs.
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