Buy American Clause Bad for Seafood
On “60 Minutes” Sunday night, veteran CBS reporter Lesley Stahl interviewed Dan DiMicco, CEO of Nucor Corp., the United States’ No. 1 steel manufacturer.
During the 13-minute segment, Stahl asked DiMicco about the “buy American” clause tucked in the $787 billion economic stimulus package President Obama will sign into law today. The provision mandates the use of U.S.-made steel unless it violates U.S. trade agreements, so steel from Canada and Europe can be used, but steel from China and Russia will be locked out.
Shrugging off accusations of protectionism, DiMicco insisted that the buy American clause, which the steel lobby fought hard for on Capitol Hill, will not trigger an international trade war.
“It’s all garbage,” he told Stahl. “There’s no such thing as free trade. Free trade is an academic luxury the real world doesn’t enjoy. If you want to study it at Harvard, study it at Harvard.”
History says otherwise. The Smoot-Hawley Tariff Act of 1930, which raised tariffs on more than 20,000 foreign goods, caused many countries to increase tariffs on U.S. goods. U.S. imports and exports plunged by more than half, and the economy slipped further into a decade-long slump.
So what’s this to do with seafood? Countries slighted by the buy American clause, such as China and Russia, could retaliate with increased tariffs, and seafood is an obvious target because it’s such a highly traded product.
Hopefully, countries will see the buy American clause for what it really is — a short-sighted attempt to jumpstart the ailing U.S. steel industry. If they don’t, we could be heading down a slippery slope of retaliatory tariffs, and given the fragile economic climate, now is definitely not the time to sour international trade relations.