Buy American is the battle cry of the stimulus package that encourages the purchase of American made raw materials. Buy Chinese says China — right after it criticized the buy USA stipulation.
Stimulus Package Stipulates to Buy American
At issue are job losses both inside the USA and in Canada; the buy American policies included in the stimulus package contain language that tie the $787 billion to a buy USA requirement, Reuters reports. In a somewhat convoluted triangle, the fact that American-made products are favored will actually jeopardize jobs of Americans working for US suppliers doing business with Canada and other countries as well.
The goods that would fall under the buy American stimulus package stipulation are those which are slated for use in public works. It is noteworthy that this would involve steel, iron and other such materials, but only to the extent that the buy USA provision would not violate already existing trade agreements. This makes it questionable if the provision to buy American made materials is doing more harm than good for the relationships with America’s largest trading partners.
What Goes Around Comes Around: China Orders Buy Chinese
While Washington was looking out for the US, China is looking out for China. The Associated Press reports that in the Chinese version of a stimulus package, a buy Chinese provision features front and center. Interestingly, China is said to have been rather critical of Washington’s buy American policy earlier on. The word used by the government news outlet was “poison” when it discussed the effect a buy USA policy would have on the world economy.
Can Consumers Buy American? Should They?
Buying American made products is harder than you might imagine. Foreign suppliers, manufacturers, and trade partners of even domestic products make it virtually impossible to truly buy American. On the flipside, at which point will consumers choose to pay a little extra for something that does not rely on the cheapest imports but instead uses slightly more expensive American made raw materials?
A crash course in economics 101 would outline that a society, which relies on foreign manufactured materials, will lose jobs in the domestic manufacturing sectors. This calls into question the notions of free trade, and also the protestations that America has grown largely into a service economy as opposed to a manufacturing economy. After all, how long can a service economy sustain itself?
Of course, there is a way for consumers to speak out and support American made, no matter what China decides and what the Washington stimulus provisions include: buy local. For example, a little more than a decade ago, Colorado instituted the “Always Buy Colorado” program in an effort to support local farmers and manufacturers. This effort sparked a number of local papers and neighborhood business associations, such as the Buy Colorado print publication, which are a mix of advertising and encouragement for locals to keep their business local.
Keeping jobs in the local community by supporting local businesses is a premier means of ensuring the health of a local economy. Of course, it does require consumers to “vote” with their checkbooks and charge cards, and this in turn requires the acceptance of higher prices and also brand switching.
How far are consumers willing to go to save local economies? How far are national businesses and business associations willing to go – and how much deeper into their pockets are they willing to dig – to support local manufacturing industries?
http://www.google.com/hostednews/ap/article/ALeqM5j1FZRNA_nf7XY7YePH-Od-tdunFAD98SD52G0; http://www.msnbc.msn.com/id/31189876/; http://www.buycolorado.net/print.php