Will Democrats' Spending Package Cause a Trade War?
11:54 AM, Jan 29, 2009 • By BRIAN FAUGHNAN
In a spending plan that will ultimately cost taxpayers more than $1 trillion, it's not surprising that significant details are only emerging now, while many more are unlikely to come to public attention for weeks or months. One such detail, which has received almost no attention, is that the bill contains a provision which is likely to spark a trade war with U.S. allies:
Beijing has already expressed concerns about Treasury Secretary Geithner's charge that China is manipulating the value of its currency, potentially setting the stage for a trade war with the country that's likely to finance much of the deficit the Democrats plan to run over the next few years. Now many other trading partners are worried that the United States is preparing to restrict access to its market, setting off a conflict with Europe and Canada.
The Obama administration needs to send a signal to Congress that the 'Buy America' provision needs to be removed from this legislation before it is sent to Obama for signature. The last thing the economy needs right now is a replay of the trade war that followed passage of the Smoot-Hawley tariff.
Ed Morrissey has more.